OPIS Insights

Barron’s Senior Energy Writer Laura Sanicola and OPIS Chief Oil Analyst Denton Cinquegrana discuss what’s ahead for oil this week.

This week’s video discusses recent developments in the oil market, focusing on the bullish run of refining equities in 2025 and what crude prices are expected to look like in the New Year.

Transcript:

LAURA SANICOLA: Hi, everyone. This is Laura Sanicola, author of Barron’s Energy Insider, and I’m here today with Denton Cinquegrana, Chief Oil Analyst at OPIS. Denton, thanks for joining me.

DENTON CINQUEGRANA: You got it. How are you, Laura?

SANICOLA: Good. And thank you everyone for joining us on our last Energy Insider OPIS collaboration of 2025. So we’re kinda gonna look back at what happened last year with oil and refining equities and estimate where we might go from here. So, Denton, the biggest surprise for me when I was looking back on refining equities was that, you know, refiners are up forty percent this year, and I don’t think either of us at this time last year predicted they’d have such a bullish run.

What were the main contributing factors to that, and do you think that they will last into next year?

CINQUEGRANA: Yeah. Really solid run for refiners. Refining margins, when you look at the futures market, were much better this year than they were last year. The diesel margin in the fourth quarter, even though it’s kind of coming back some to close out the year, it’s probably the strongest in couple of years here for a quarterly average.

So they’ve done pretty well as far as refining margins. I was actually looking at some spot prices earlier today, and the ranges between the high and low this year really narrow. And that kind of helps explain, you know, retail gasoline prices being in a really narrow range so far this year. But I think that stability in the spot market and relatively low crude oil prices are kind of the key drivers behind those solid returns for refiners this year.

SANICOLA: So given that we all anticipate that crude oil prices are probably gonna continue to stay under pressure for much of next year and also, while global demand is strong, I think, some of your colleagues have pointed out to me the cast freight index indicates that domestically, US diesel, you know, not so hot, not as hot as it was last year for a number of reasons. Obviously, the freight index is related to diesel because diesel is what trucks used to run.

So do you think that means that retail prices will be lower for gasoline and diesel next year?

CINQUEGRANA: I do. I do. And it all starts with crude oil. I’ve been foreseeing predictions and forecasts for crude oil in the in the fifties and low sixties.

This is gonna contribute to lower retail gasoline prices. Obviously, the year’s not quite over yet, but as it currently stands, the national average is about three dollars and twelve cents a gallon. So pretty low, obviously lower than the last couple of years. But the interesting thing is from really two ninety to about three twenty five, that’s been the whole range this year.

I’ve been doing this for a long time, as you could tell by the, you know, gray and lack of hair these days that, you know, this is a really tight range for retail gasoline prices. So it’s it’s pretty astounding. I suspect that might get a little bit more of the same.

This really there were several events that really could have sent the market into into orbit here, and it and they just didn’t. So cooler heads ended up prevailing. Maybe it’s traders just not chasing oil like they have in the past based on certain events. But at the end of the day, it was the consumer that was the beneficiary there.

SANICOLA: All right, thanks so much Denton, and thanks everyone for joining us this year. We’ll see you in the New Year.