Trump's economic plans called for more oil drilling and lower gas prices. He's only getting the latter.

Core Insights - The US oil and gas sector is experiencing a contraction, with production activity declining for two consecutive quarters, leading to lower oil prices [1][2] - Brent crude futures are down over 13.5% and West Texas Intermediate crude futures are down over 14.5% year-to-date, with forecasts indicating a continued decline in US oil production [3] - The oil and gas industry is facing challenges due to high drilling costs and a potential supply glut, which is further exacerbated by increased production from OPEC [5][7] Industry Conditions - Industry participants report worsening conditions, with expectations of continued low prices impacting investment decisions [2] - The US Energy Information Administration forecasts a 1% decline in US oil production by 2026, while natural gas production is expected to remain stable [3] - High crude prices typically encourage investment in production, but falling prices make drilling less justifiable [4] Market Dynamics - A supply glut is anticipated, with gasoline demand projected to rise only slightly by 2026, and a shift towards solar power for electricity consumption [6] - OPEC has approved production increases, with a recent announcement of an additional 137,000 barrels per day in October [7] - China is accumulating large stockpiles of crude oil, contributing to a processing bottleneck in US refineries, which are operating at their highest capacity since June 2022 [8]