Barron’s Energy Insider | In Partnership with OPIS | Video – November 4, 2024

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

Transcript:

LAURA SANICOLA: Hi, everyone. This is Laura Sanicola. I’m the writer of the Energy Insider newsletter at Barron’s, and I’m here today with my colleague, Denton Cinquegrana. He’s the chief oil analyst at OPIS.

And today, we’re gonna talk about whether the outlook for energy has changed, given the heightened tensions in the Middle East. So remind me what’s at stake for oil.

DENTON CINQUEGRANA: Sure. Well, thanks again for having me. At the beginning of the week, prices dropped pretty significantly after Israel’s attack on Iran, and they hit military installations, instead of energy and oil and nuclear, etcetera. But towards the end of the week, you saw a headline. You mentioned the Axxios headline about Iran getting ready to retaliate back. The market has just about recovered all of those losses from the beginning of the week, and it’s just more proof that this tit-for-tat is probably not ending anytime soon. And then it’s also another piece of evidence that the market tends to do thing overdo it to the downsides, downside on news, and it also tends to overdo it to the upside. So this is just another piece of that happening right now.

WTI prices are in the seventy-one dollar per barrel area. Closed right around 72 the week before, so we’re just about back to where we were at the end of last week.

SANICOLA: Also this week, of course, we have the US election. How can whoever our next president might be change their approach to the Middle East, and do you think it will have an effect on oil prices going forward?

CINQUEGRANA: Yeah. Well, it seems that if Harris wins, it’ll be more diplomacy trying that avenue. I think if Trump wins, he has the opportunity potentially to kill kinda two birds with one stone. It sounds like tariffs on China and a bit of a trade war coming there. Well, if he could amp up the sanctions and really tighten the screws on Iran, he could end up killing two birds with one stone because most of the Iranian exports, which are just inside about two million barrels a day, go to China. So that’s one way he could he could hurt both economies there.

SANICOLA: I just wanna wrap up talking about earnings, which are almost done this week. We’ve got a few majors reporting. Did oil executives, or other energy executives on their investor calls give any steer about the outlook for 2025 that maybe we haven’t talked about already?

CINQUEGRANA: Yeah. Well, obviously, the third quarter was was not a good one for refiners. We’ve gone over that a million times. Fourth quarter, probably maybe a little bit better, but probably not much.

I think they’re really hoping that in 2025, with refinery closures, increased product demand, that things get back become a little bit better. Probably not the 2022 or 2023 levels, but do see some improvement. Me, personally, I think 2025 might be another one of those kind of up and down type of years where it may, you know, be okay, but still not much better than this year. And then into ’26 and beyond, that’s when things start to get a lot better for refiners.

SANICOLA: Alright. Thanks so much, Denton, for, joining us, and I’ll see everybody next week.