Trump on High Gas Prices: "We're Making a Freaking Fortune"
Trump Said It Anyway
President Donald Trump used a midterm rally in Perry, Georgia, on Saturday to boast about the money high oil prices are bringing in, over the objections of his own advisers.
"My people said, please don't mention that, sir, because people are paying a little higher," Trump said. "I can see the fake headlines: President Trump is bragging about all the money they're making while people are suffering at the pump. I don't give a damn. We're making a freaking fortune."
"We're making money like we've never made before," he added, saying the United States oil and gas business is "making hundreds of billions of dollars" while oil prices are temporarily high.
Trump also said pump prices are going to come down.
Prices at the Pump
The national average price for a gallon of regular gasoline stood at $4.29 on October 25, per AAA. That compares with roughly $3.06 to $3.12 a gallon a year ago.
Diesel, the fuel that moves trucks and farm equipment, sat at about $6.34 to $6.35 a gallon, per AAA figures cited in coverage, up from $3.75 the day before the conflict with Iran began.
The throttling of the Strait of Hormuz has pushed oil buyers toward American producers in Texas, Oklahoma and Louisiana. Brent crude traded near $116 a barrel, its highest in almost six months, per HuffPost.
Americans have paid above $4 a gallon for much of the year, and consumer prices rose 3.7 percent year over year in September, above the 3.6 percent expected.
The Fortune Is Real, and So Is the Backlash
Trump is not wrong that money is being made. A second-quarter report from the Oil & Gas Journal found that a sample of 38 US producers and refiners grew revenues by about $140 billion year over year, fueled by surging crude prices tied to Strait of Hormuz disruptions.
Democrats moved quickly to turn the quote into campaign material, ten days before the November 3 midterms. California Governor Gavin Newsom wrote: "Congratulations to Big Oil on their very successful, record-profits presidency."
At the same rally, Trump promised every adult citizen a $5,000 "Trump dividend" if Republicans win the House and Senate, on the condition the money is spent inside the United States.
What This Means for Markets
Energy is the trade sitting directly under this story. Integrated majors XOM and CVX capture the upstream windfall, while refiners VLO, MPC and PSX live and die by crack spreads at these diesel prices.
The energy sector fund XLE and the crude fund USO are the liquid ways traders express a view on whether $116 Brent holds.
The other side of the ledger is the consumer. Sustained $4.29 gasoline and $6.34 diesel feed straight into inflation prints, rate expectations and the midterm map, which is why a rally quote can move the political risk premium even when it does not change a single barrel.
Bottom Line
Trump said the quiet part out loud: high oil prices are a fortune for US producers and a pain at the pump, and he is betting voters credit him for the first and forgive him for the second before prices fall.
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