October 16, 2025 • 7 mins
Oil and Gas Analyst Tom Kloza looks at the latest oil prices and says we're in good shape for a while!
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Let's check in with Tom Close on the Legacy Retirement
Group dot com phone line. Tom's an oil and gas analyst.
We've had him on a number of times, one of
the best in the business.
Speaker 2 (00:08):
Tom. How are you this morning, sir.
Speaker 3 (00:10):
I'm doing well back in Florida now, so it's nice
to be in the great weather again.
Speaker 2 (00:16):
Good for you. I'm happy for you.
Speaker 1 (00:17):
That sounds lovely, especially as we're looking at forty five
degrees here this morning. We are looking at some decent
gas prices, though at the pump time in central Ohio
we're down well below three bucks a gallon.
Speaker 2 (00:28):
How long can we continue this?
Speaker 3 (00:31):
You will see this continue basically for the next five
or six months, and you know, the average prices maybe
about two sixty seven or two seventy there, but you've
got some folks under two twenty five and as low
as about two dollars and twelve cents. And those are
the lowest numbers you've seen since the second quarter of
(00:51):
twenty twenty one, when we were really coming out of
kind of the crazy COVID times.
Speaker 2 (00:57):
Right right's that is very affordable.
Speaker 1 (00:59):
And I saw a story, you know, crude oil could
fall below fifty bucks a barrel and there's some you know,
the Bank of America said that they're warning.
Speaker 2 (01:09):
Why is that a warning that to me sounds like
a good deal.
Speaker 3 (01:13):
Well, you run into a lot of different problems with
the Petro States and with some other entities when the
prices dropped too quickly. I mean, if you just judge
regular inflation or whatever, you know, we're below sixty dollars
right now for domestic crude, and that's probably the beginning
of an overreaction. But these markets always overreact, and it
(01:36):
may be that we're going to overreact and go below fifty.
If you look at the next fifteen months, the estimates
are that they'll be about somewhere between one to three
million barrels of day more crude oil than there is
demand for it. So that that's a pretty daunting challenge.
Speaker 1 (01:54):
Coming up is one of those overreactions based on the
Gaza ceasefire and the plan there in the Middle East
is that is that one of the reasons the oil
prices have dropped as quickly as they have.
Speaker 3 (02:06):
You know, the whole deal political thing hasn't had the
impact that it had, you know, previously in this century.
If you look at Dazzla you look at Mid East,
you look at the Hoot East, you look at some
of the problems you've had in sending oil through some
of those areas not having the impact it did. And
(02:26):
I would suggest that, you know, one of the big
things that people don't talk about is that the oil
industry doesn't have the big financial buyers propping it up
like it used to. It used to be if you
wanted to make it rich, you might buy some oil
futures or something like that. That money, that hot money
has gone into the NAG seven stocks crypto and then
(02:49):
you know, more recently gold, it's not going into oil.
And when the money stops, you know, the market stumbles.
Speaker 1 (02:56):
Interesting Tom Close, our guest oil and gas analyst, long
time one of the best in the business there.
Speaker 2 (03:02):
So do it begs the question?
Speaker 1 (03:04):
Then do other energy sources affect the price of oil
and gas that people are going into, you know, the
natural gas, or people are going into you know, lithium
or you know some other sources for batteries. That does
that impact the price at all?
Speaker 3 (03:21):
Well, I think everybody realizes now that the talk about
the energy transition a few years ago was very very premature. Uh,
it's going to be a long transition, and we're going
to continue to use more oil and gas probably into
the next decade. But it will change, but it's not
going to change for the next few years. And that's
(03:42):
the oddity here, is that you've got global demand as
high as it's ever been and probably growing appreciably this year,
and yet you have a lot of supply coming on.
And it's not just US shale, it's all of these
other projects that were funded back in you know, the
late two thousand, in seventeen or eighteen. So we're going
(04:05):
to be comfortable until we're not. And I would say
we're going to be comfortable through twenty twenty six.
Speaker 2 (04:11):
I don't have any problem with that. Tom.
Speaker 1 (04:13):
And you know you mentioned the global demand. Are other
countries backing off on Russian oil? I know the Trump
administration has asked a number of countries to stop buying
oil from the Russians.
Speaker 2 (04:24):
Is that working?
Speaker 3 (04:26):
That's going to be interesting to watch in the next
few months, because the Russians, you know, tend to find
buyers for the molecules. The buyers aren't necessarily the European countries,
but it'll go places there. Sometimes it goes to Malaysia
where it gets repackaged as Malaysian oil or whatever. So
I think they're going to find things. There is some
(04:46):
noise right now about it you not buying Russian oil,
and there's the threat to put in huge tariffs for
China if they continue to buy Russian oil. We'll see.
It's also one of those things you'll look at and
you go, my goodness. If there is ever a real
peace effort for the Ukrainian war, we could see oil
(05:07):
prices plunge well below that fifty dollars that was you
talked about earlier.
Speaker 1 (05:12):
We thank of America wells fascinating so here at home,
you know, and it's just basic supply and demand, right Tom.
It's the drillers see the price coming down that they
produced last year.
Speaker 4 (05:24):
Domestically, Yeah, we hit our peak for gasoline demand from
twenty sixteen to nineteen. We're using probably about three or
four hundred thousand barrels a day less gasoline than we did.
Speaker 3 (05:36):
In those years. And the reason is, I mean, you know,
the average car on the road I saw yesterday the
stats at fourteen years old. I thought, I was, you know,
one of those strange ones that add an older car
but we're making the cars better, they're getting better fuel efficiency.
We're seeing some intrusion by the electric vehicles, and all
(05:58):
of that adds up to a lot less demand for
gasoline than we would have seen if we were on
a different course.
Speaker 1 (06:05):
Well, with the price of gas though, as low as
it is, Tom, and the price of electric at least
here in Central Ohio is going through the roof, I
don't know how much of a good idea and ev
E makes.
Speaker 3 (06:16):
Yeah, you know, we'll see what happens. China is selling
far more evs right now than the r fuel cars,
and they probably peaked, you know, a couple of years
ago for their demand as well. But that's a different
kind of command and control economy. I don't think we
have that here in the United States. And people want,
(06:36):
you know, their cars that behave like they have for
the last sixty years.
Speaker 1 (06:41):
Well, it's interesting to talk about. And you know, my
take home from you, Tom is, as far as price
is here in Central Ohio, the next twelve to fifteen months,
we should be in pretty good shape.
Speaker 3 (06:52):
Absolutely. I mean it would take drone attacks not on
Russian refineries, but on US or European refine binaries to
really turn this thing around. This looks like, you know,
one of the cheapest sort of fifteen month periods that
we've seen in a long time. And it means that
the United States, you know, we paid as much as
(07:14):
two billion dollars a day for gasoline back in twenty
twenty two. We're going to go below a billion. And
that gives some people some additional spending power.
Let's check in with Tom Close on the Legacy Retirement
Group dot com phone line. Tom's an oil and gas analyst.
We've had him on a number of times, one of
the best in the business.
Speaker 2 (00:08):
Tom. How are you this morning, sir.
Speaker 3 (00:10):
I'm doing well back in Florida now, so it's nice
to be in the great weather again.
Speaker 2 (00:16):
Good for you. I'm happy for you.
Speaker 1 (00:17):
That sounds lovely, especially as we're looking at forty five
degrees here this morning. We are looking at some decent
gas prices, though at the pump time in central Ohio
we're down well below three bucks a gallon.
Speaker 2 (00:28):
How long can we continue this?
Speaker 3 (00:31):
You will see this continue basically for the next five
or six months, and you know, the average prices maybe
about two sixty seven or two seventy there, but you've
got some folks under two twenty five and as low
as about two dollars and twelve cents. And those are
the lowest numbers you've seen since the second quarter of
(00:51):
twenty twenty one, when we were really coming out of
kind of the crazy COVID times.
Speaker 2 (00:57):
Right right's that is very affordable.
Speaker 1 (00:59):
And I saw a story, you know, crude oil could
fall below fifty bucks a barrel and there's some you know,
the Bank of America said that they're warning.
Speaker 2 (01:09):
Why is that a warning that to me sounds like
a good deal.
Speaker 3 (01:13):
Well, you run into a lot of different problems with
the Petro States and with some other entities when the
prices dropped too quickly. I mean, if you just judge
regular inflation or whatever, you know, we're below sixty dollars
right now for domestic crude, and that's probably the beginning
of an overreaction. But these markets always overreact, and it
(01:36):
may be that we're going to overreact and go below fifty.
If you look at the next fifteen months, the estimates
are that they'll be about somewhere between one to three
million barrels of day more crude oil than there is
demand for it. So that that's a pretty daunting challenge.
Speaker 1 (01:54):
Coming up is one of those overreactions based on the
Gaza ceasefire and the plan there in the Middle East
is that is that one of the reasons the oil
prices have dropped as quickly as they have.
Speaker 3 (02:06):
You know, the whole deal political thing hasn't had the
impact that it had, you know, previously in this century.
If you look at Dazzla you look at Mid East,
you look at the Hoot East, you look at some
of the problems you've had in sending oil through some
of those areas not having the impact it did. And
(02:26):
I would suggest that, you know, one of the big
things that people don't talk about is that the oil
industry doesn't have the big financial buyers propping it up
like it used to. It used to be if you
wanted to make it rich, you might buy some oil
futures or something like that. That money, that hot money
has gone into the NAG seven stocks crypto and then
(02:49):
you know, more recently gold, it's not going into oil.
And when the money stops, you know, the market stumbles.
Speaker 1 (02:56):
Interesting Tom Close, our guest oil and gas analyst, long
time one of the best in the business there.
Speaker 2 (03:02):
So do it begs the question?
Speaker 1 (03:04):
Then do other energy sources affect the price of oil
and gas that people are going into, you know, the
natural gas, or people are going into you know, lithium
or you know some other sources for batteries. That does
that impact the price at all?
Speaker 3 (03:21):
Well, I think everybody realizes now that the talk about
the energy transition a few years ago was very very premature. Uh,
it's going to be a long transition, and we're going
to continue to use more oil and gas probably into
the next decade. But it will change, but it's not
going to change for the next few years. And that's
(03:42):
the oddity here, is that you've got global demand as
high as it's ever been and probably growing appreciably this year,
and yet you have a lot of supply coming on.
And it's not just US shale, it's all of these
other projects that were funded back in you know, the
late two thousand, in seventeen or eighteen. So we're going
(04:05):
to be comfortable until we're not. And I would say
we're going to be comfortable through twenty twenty six.
Speaker 2 (04:11):
I don't have any problem with that. Tom.
Speaker 1 (04:13):
And you know you mentioned the global demand. Are other
countries backing off on Russian oil? I know the Trump
administration has asked a number of countries to stop buying
oil from the Russians.
Speaker 2 (04:24):
Is that working?
Speaker 3 (04:26):
That's going to be interesting to watch in the next
few months, because the Russians, you know, tend to find
buyers for the molecules. The buyers aren't necessarily the European countries,
but it'll go places there. Sometimes it goes to Malaysia
where it gets repackaged as Malaysian oil or whatever. So
I think they're going to find things. There is some
(04:46):
noise right now about it you not buying Russian oil,
and there's the threat to put in huge tariffs for
China if they continue to buy Russian oil. We'll see.
It's also one of those things you'll look at and
you go, my goodness. If there is ever a real
peace effort for the Ukrainian war, we could see oil
(05:07):
prices plunge well below that fifty dollars that was you
talked about earlier.
Speaker 1 (05:12):
We thank of America wells fascinating so here at home,
you know, and it's just basic supply and demand, right Tom.
It's the drillers see the price coming down that they
produced last year.
Speaker 4 (05:24):
Domestically, Yeah, we hit our peak for gasoline demand from
twenty sixteen to nineteen. We're using probably about three or
four hundred thousand barrels a day less gasoline than we did.
Speaker 3 (05:36):
In those years. And the reason is, I mean, you know,
the average car on the road I saw yesterday the
stats at fourteen years old. I thought, I was, you know,
one of those strange ones that add an older car
but we're making the cars better, they're getting better fuel efficiency.
We're seeing some intrusion by the electric vehicles, and all
(05:58):
of that adds up to a lot less demand for
gasoline than we would have seen if we were on
a different course.
Speaker 1 (06:05):
Well, with the price of gas though, as low as
it is, Tom, and the price of electric at least
here in Central Ohio is going through the roof, I
don't know how much of a good idea and ev
E makes.
Speaker 3 (06:16):
Yeah, you know, we'll see what happens. China is selling
far more evs right now than the r fuel cars,
and they probably peaked, you know, a couple of years
ago for their demand as well. But that's a different
kind of command and control economy. I don't think we
have that here in the United States. And people want,
(06:36):
you know, their cars that behave like they have for
the last sixty years.
Speaker 1 (06:41):
Well, it's interesting to talk about. And you know, my
take home from you, Tom is, as far as price
is here in Central Ohio, the next twelve to fifteen months,
we should be in pretty good shape.
Speaker 3 (06:52):
Absolutely. I mean it would take drone attacks not on
Russian refineries, but on US or European refine binaries to
really turn this thing around. This looks like, you know,
one of the cheapest sort of fifteen month periods that
we've seen in a long time. And it means that
the United States, you know, we paid as much as
(07:14):
two billion dollars a day for gasoline back in twenty
twenty two. We're going to go below a billion. And
that gives some people some additional spending power.
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