Oil and gas prices are likely to fall under a second Donald Trump presidency, says a prominent energy analyst at Bank of America (BAC).
Don't Miss our Black Friday Offers:
- Unlock your investing potential with TipRanks Premium - Now At 40% OFF!
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
In an interview with Bloomberg television, analyst Francisco Blanch said that Trump’s proposed tariffs will likely curb global trade, driving down prices for crude oil and natural gas. “America first means commodities second,” he said.
Trump has proposed tariffs of up to 20% on all countries, except for China, where America would impose duties as high as 60%. Those proposed tariffs are likely to slow economic growth and lead to higher inflation and interest rates, dampening demand and prices for oil and natural gas, said Blanch.
Record U.S. Production
While Trump has also promised to deregulate fossil fuel production in the U.S., Blanch said that if prices for oil and gas are lower amid tariffs, that could mean production slows as producers have less incentive to increase drilling.
U.S. oil production is already at record highs, reaching 13.4 million barrels a day in August of this year, leaving little room for increased production under the best of circumstances. Blanch added that demand concerns in China and geopolitical tensions add to a gloomy outlook for energy heading into 2025.
West Texas Intermediate (WTI) crude oil, the U.S. standard, is currently trading just below $70 a barrel.
Is BAC Stock a Buy?
Bank of America’s stock has a consensus Strong Buy rating among 16 Wall Street analysts. That rating is based on 14 Buy and two Hold recommendations assigned in the last three months. The average BAC price target of $48.36 implies 3.40% upside from current levels.
