What happened

For the second day in a row, oil prices are tumbling Thursday -- and they're taking down shares of companies all across the energy industry along with them.

As of 1:30 p.m. ET, oil-field services company Core Laboratories (CLB) is down 5.2%, oil major Chevron (CVX 0.46%) is losing 4.8%, and further down the supply chain, refiner Phillips 66 (PSX -0.44%) is suffering worst of all with a 7.5% loss.

So what

From a closing price near $119 last Friday, the price of WTI crude oil dropped to $111 through Tuesday, then dropped 3% more yesterday and another 1.4% today -- ending up around $105 a barrel.  

That news alone would probably have been enough to give oil stock prices a shove to the downward side. But there's other bad news that's also weighing on the industry today. For example, this morning The Wall Street Journal reported that gasoline prices near $5 per gallon nationally have begun to depress consumer demand. Retail sales at gas stations were down 8.2% year over year in the first week of June, and that was "the 14th consecutive week that sales have lagged behind 2021 levels," the Journal reported.  

It's entirely logical that high gas prices would depress demand for gas -- and that this would result in both lower prices for oil and lower prices for oil stocks as well.

Now what

Aiming to mitigate the rise in gas prices, the Biden administration has proposed a 90-day gas tax holiday that would suspend collection of federal taxes on the sale of gas and diesel fuel, effectively cutting the cost of a gallon of gas by $0.18 and a gallon of diesel by $0.24.

The administration is proposing this move in order to help out consumers. But theoretically, it might also improve demand for gasoline, to the benefit of oil companies up and down the supply chain. Problem is, even if the plan worked -- gas prices declined, and gas purchases increased -- the laws of supply and demand dictate that absent an increase of supply (and gas refining capacity is already maxed out, so that there can be no increase in supply), any such increase in demand for gas would quickly push prices right back up again.

In any case, Congress doesn't seem inclined to pass the president's proposed gas tax holiday, so this is probably a moot point. Investors betting on passage of a gas tax reprieve to even temporarily boost profits at Core Labs, Chevron, or Phillips 66 are probably out of luck, and this is yet another factor weighing on the stocks today.  

The good news for oil investors, though, is that they probably didn't need a gas tax holiday in any case. Not all oil stocks are cheap, true. Core Labs at 99 times trailing earnings and 22 times forward earnings doesn't look too attractive, for example. But with Chevron stock selling for nearly 10 times forward earnings and paying a 3.8% dividend yield, and Phillips 66 stock nearly as cheap -- and paying a 4% dividend -- bargains in the energy industry really aren't that hard to find right now.