Trump likely to aggressively attempt to limit gasoline price appreciation

Trump's amenable relationship with Saudi Arabia, and easing US demand growth will help him achieve this goal.

Market & Trading Calls

• While Donald Trump will likely take an aggressive stance towards Iran, he will look to pressure OPEC+ to pump more oil if Brent prices move above $80/bbl next year. We currently estimate Brent prices will average out to roughly $75/bbl next year, down from $81/bbl in 2024.
• Similar to his first term in office, Trump will focus on limiting gasoline price appreciation, which shares a close link to consumer sentiment. In Trump’s first term, the average unleaded retail gasoline price averaged $2.38/gal, well below the $3.33/gal seen during the Biden administration, who was forced to deal with a war in Ukraine, a less than amenable relationship with Saudi Arabia, and surging energy demand in the years immediately following the Covid pandemic.
• Assuming a $3/bbl WTI discount to Brent next year, we estimate the possibility that US retail unleaded gasoline prices average out to a range near $2.80/gal, roughly 42 cents below the 12-month average through October of this year.