Trump's economic plans called for more oil drilling and lower gas prices. He's only getting the latter.
Bottom line: President Trump has gotten one part of his wish: Prices at the gas pump are, on average, down. The EIA forecast in early September that retail gasoline prices would average $3.10 per gallon in 2025, down $0.20 per gallon from last year. Prices are expected to fall even more in 2026, down to an average of $2.90 per gallon.
But the other part of the wish is on hold.
The One Big Beautiful Bill, the Trump Administration's signature policy, should alleviate declining production slightly. The act increases leasing offerings and lowers federal royalty rates, essentially making more land available to oil and gas companies at cheaper prices.
But only 6% of respondents to the survey by the Dallas Fed said they believed the policies would make a significant difference.
"Easing US oil field regulations, the availability of federal lands and the ‘drill baby drill’ mantra from the President do not appear to be bringing a change of strategy to this part of the oil industry," wrote Guinness Global Investors analysts Jonathan Waghorn and Will Riley in a September strategy note.
The effect is evident in the field. In the Bakken formation, a major oil and gas field that runs through North and South Dakota, Montana, and central Canada, Exxon Mobil (XOM) sold off $550 million worth of the equipment it uses to drill for fossil fuels to a smaller regional company earlier this month, and Chevron (CVX) announced it is going to cut down its rig count from four to three.
Natural gas prices are steadily rising, but the US has been expanding its exports of the product, keeping production largely flat.
Impacts on the oil and gas sector also appear to be rippling out more broadly.
Factory activity in Texas expanded in September, but at a slower rate than in August, according to a Dallas Fed survey. New orders and the growth rate of orders both fell on the month, while prices paid for raw materials increased — though at a slower clip than in August.
"We see the oil industry slowing and are more hesitant to invest in their business," one respondent, working in machinery manufacturing, said.
Instead of supporting domestic production, a survey respondent said, the Trump administration has aligned itself with the OPEC cartel, attempting to use oversupply to depress prices and in turn hindering fossil fuel producers.
The Energy Information Administration predicts that conditions will continue to worsen. The agency expects Brent crude, currently trading around $68 per barrel, to average $59 per barrel in the fourth quarter and $50 per barrel in early 2026, while inventories build more than 2 million barrels per day over the same period.
"The previous administration vilified the industry, buried it in regulation and cheered the flight of capital under the environmental, social and governance banner," one respondent to the Dallas Fed survey said. "Now the current administration is finishing the job."
Jake Conley is a breaking news reporter covering US equities for Yahoo Finance. Follow him on X at @byjakeconley or email him at jake.co
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