Gas prices have been one bright spot for wallets this year... According to the U.S. Energy Information Administration ("EIA"), the average price of gas fell below $3 per gallon earlier this month. That's the lowest price since 2021.

Why Cheap Gas Might Last Longer Than You Think By Joe Austin, senior analyst, Chaikin Analytics Gas prices have been one bright spot for wallets this year... According to the U.S. Energy Information Administration ("EIA"), the average price of gas fell below $3 per gallon earlier this month. That's the lowest price since 2021. Take a look at this chart from the EIA... The EIA also expects that consumers will spend around 2% of their disposable income on gas this year. That's the lowest share since 2005, excluding 2020 when travel dropped because of the COVID-19 pandemic. Behind the low gas prices is a big drop in the price of oil. West Texas Intermediate crude oil sells for around $57 per barrel right now. That's down from around $80 back in January.  And the consensus seems to be that oil prices will stay low in the months ahead... JPMorgan Chase (JPM) sees West Texas Intermediate crude at $54 per barrel next year and $53 per barrel in 2027. And Goldman Sachs (GS) thinks prices could fall as low as $52 per barrel next year.  That sounds like great news for consumers. But the overall energy sector has taken a hit amid oil's struggles. In the Power Gauge, we can track this space with the Energy Select Sector SPDR Fund (XLE). Take a look at the chart below... As you can see, XLE is about flat over the past year. That compares with a roughly 13% gain for the S&P 500 Index over the same time frame. The Power Gauge currently rates XLE as "neutral." And you can see in the chart that our system has been "neutral" or "bearish" on the fund for most of the past year. I'll also note that the Power Gauge has flagged 11 different sell signals for XLE over the past year. Oil's weakness stands apart from other commodities. This year, gold has soared more than 60%... silver has more than doubled... and copper is up more than 30%. Oil prices usually signal inflation. But this year's weakness tells a different story. It's one of massive oversupply and sluggish demand. While other commodities soared, oil stayed flat. Producers are pumping more while buyers want less. And the world's biggest oil buyer is using less of it every day... Recommended Links: Tomorrow: 'I'm Issuing My First Bear Market Warning Since 2022' He accurately predicted the 2020 COVID-19 crash and the brutal 2022 bear market weeks before they struck. Today, legendary analyst Marc Chaikin is raising the red flag again, saying there is a 65% chance that 2026 will usher in the next great bear market... with an average market drop of 20%. He will show you ALL the historical evidence, along with how to pinpoint the date to GET OUT of the markets before the worst days arrive. Before tomorrow, get the full details here. The $20 Move Giving You Exposure to 2 Ounces of Pure Gold (Worth About $8,000 Today) An ex-Goldman Sachs vice president reveals a secret of the rich and connected that lets you tap into the upside of a huge amount of real, physical gold for just about $20 at a time. He says the future upside could be 1,000%. Even a relatively small amount of money could go a long way when every $20 or so leverages the upside in 2 ounces of pure gold, as he'll explain. See this $20 "gold hack" right here. China's EV Boom Is Crushing Global Oil Demand The main reason for oil's decline is a massive supply glut. Since the end of 2024, oil supply has increased by 3 million barrels per day. On the other hand, demand has risen by only 0.7 million barrels per day. Earlier this year, the International Energy Agency ("IEA") projected that inventories would rise at a rate of 2.5 million barrels per day in the second half of 2025. And the IEA thinks the surplus could hit 4 million barrels per day in 2026. A second reason is that oil cartel OPEC's market-share gamble backfired. After imposing voluntary production cuts in 2023, OPEC began unwinding them in April of this year. And the decision to prioritize market share over high prices pushed oil down all year. Non-OPEC producers are also pumping at record levels... U.S. crude oil production hit a record of more than 13.6 million barrels per day in July. Brazil, Guyana, and Canada have also been ramping up production. And on the demand side, China has become the wild card. China is the world's largest oil importer. But this year, it has been stockpiling crude oil instead of refining it. Its domestic output and imports exceeded refinery throughput by about 690,000 barrels per day in October. China's buying absorbs excess supply and keeps a floor under prices. But it's artificial support. Once those stockpiles fill up, China will stop buying as much. That will lead to prices falling further. Worse, weak refining activity means that the Chinese economy is sluggish and that fuel demand is soft. And that's a massive drag on global oil consumption. Then there's China's electric-vehicle ("EV") revolution... Here in the U.S., we may be having second thoughts on EVs. But China is forging ahead. In 2024, China sold more than 11 million EVs. That was nearly half of all the country's car sales. By 2030, EVs are expected to capture 80% of the Chinese market.  And this is already having an impact. China's EV fleet is displacing more than 1.1 million barrels per day of oil demand. That's roughly equivalent to Oman's entire daily production. The displacement is accelerating by 431,000 barrels per day. That's up from 284,000 barrels per day in 2023... and is expected to jump to another 600,000 barrels per day over the next 12 months. China isn't just electrifying cars... It's ditching gas and diesel across trucks, buses, and motorcycles. EVs are already eliminating 2.6% of China's annual crude demand. And that figure keeps climbing. So with China stepping back, it's likely there will be too much oil for some time to come. The biggest buyer is using less. The producers are pumping more. And the imbalance keeps growing. For consumers, that's great for cheap gas. But for energy investors, it means problems ahead. Of course, this situation won't last forever... Keep an Eye on XLE The oversupply will eventually correct itself – either through production cuts when prices fall too far, or if demand should reaccelerate for one reason or another. To keep an eye on this, I'll be watching XLE. It's the best broad gauge of the energy sector. And it holds major oil and gas companies. When the market starts to see a turn in oil prices, XLE will likely move first. We should also see it in the Chaikin Money Flow patterns of individual stocks. Institutional "smart money" usually flows into energy stocks before oil itself hits bottom. Right now, the Power Gauge is still "neutral" on XLE. That makes sense given the oversupply dynamics. But if that rating flips to "bullish" – or if the Power Gauge starts flagging multiple buy signals – that could be an early warning that sentiment is shifting. And we're lucky to have the Power Gauge on our side to help us spot the shift. Good investing, Joe Austin Market View Major Indexes and Notable Sectors     # Hld:     Bullish     Neutral     Bearish Dow 30 -0.51% 11 13 6 S&P 500 -1.08% 122 232 143 Nasdaq -1.91% 22 52 26 Small Caps -1.53% 682 913 306 Bonds -0.96% — According to the Chaikin Power Bar, Small Cap stocks are more Bullish than Large Cap stocks. Major indexes are mixed. *  *  *  * Sector Tracker Sector movement over the last 5 days Materials +2.4% Financial +2.37% Industrials +1.4% Consumer Staples +1.22% Consumer Discretionary +0.81% Health Care +0.52% Communication -0.5% Real Estate -0.59% Energy -0.89% Utilities -1.09% Information Technology -1.98% *  *  *  * Industry Focus Oil & Gas Exploration & Production Services 14 28 9 Over the past 6 months, the Oil & Gas Exploration & Production subsector (XOP) has underperformed the S&P 500 by -11.06%. However, its Power Bar ratio, which measures future potential, is Strong, with more Bullish than Bearish stocks. It is currently ranked #13 of 21 subsectors and has moved down 4 slots over the past week. Top Stocks DVN Devon Energy Corpora PARR Par Pacific Holdings PBF PBF Energy Inc. *  *  *  * Top Movers Gainers LULU +9.6% MOS +4.05% GE +3.95% CMG +3.64% BALL +3.45% Losers SNDK -14.66% AVGO -11.43% GLW -7.97% ANET -7.17% APH -7.08% *  *  *  * Earnings Report Reporting Today Rating Before Open After Close Earnings Surprises No significant Earnings Surprises in the Russell 3000. *  *  *  * You have received this e-mail as part of your subscription to PowerFeed. If you no longer want to receive e-mails from PowerFeed, click here. You're receiving this e-mail at STEVENMAGALLANES520.NIMS@BLOGGER.COM. For questions about your account or to speak with customer service, call +1 (877) 697-6783 (U.S.), 9 a.m. - 5 p.m. Eastern time or e-mail info@chaikinanalytics.com. Please note: The law prohibits us from giving personalized financial advice. © 2025 Chaikin Analytics, LLC. All rights reserved. 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