Oil prices skid as Biden pushes for US fuel cost cuts

: Oil prices plunged more than $4 a barrel on Wednesday amid a push by US President Joe Biden to lower fuel costs, including pressure on the country’s major energy companies to help ease the drivers’ pain during the summer consumption peak.

At 0425 GMT, U.S. West Texas Intermediate (WTI) crude futures were at their lowest, but still down $4.04, or 3.7%, at $105.48 a barrel. Similarly, Brent crude futures fell $3.87, or 3.4%, to $110.78 a barrel.

As the United States struggles to combat soaring gasoline prices and inflation, President Joe Biden is expected to seek the temporary suspension of the 18.4 cents per gallon federal tax on gasoline on Wednesday, a a source briefed on the plan told Reuters.

“I think Biden’s relentless headlines, with the administration seemingly in inflationary panic mode, played a part in the latest selloff, as investors hate any uncertainty, even if it’s irrational in the context of supply issues. known,” Stephen said. Innes, managing partner at SPI Asset Management, in a note.

Seven oil companies are due to meet Biden on Thursday, under pressure from the White House to lower fuel prices as they make record profits.

However, Chevron Chief Executive Michael Wirth said Tuesday that criticizing the oil industry was not the way to lower fuel prices.

“These actions are not beneficial to addressing the challenges we face,” Wirth said in a letter to Biden, which sparked a response from Biden saying the industry was being too sensitive.

Despite inflation concerns, demand is still on track to recover to pre-COVID levels and supply is expected to lag demand growth, which will keep the market tight, as the trading giant Vitol and Exxon Mobil Corp reported this week.

“The market is still coming to terms with the growing disruption to Russian oil. European sanctions have not yet come into effect,” ANZ Research analysts said in a note, pointing to data showing that so far , there was only a relatively limited decline in Russian oil. Europe’s fuel supply since the beginning of the conflict.

Meanwhile, U.S. oil refining capacity slumped in 2021 for the second year in a row, the latest government data showed on Tuesday, as plant shutdowns continued to cut capacity to produce gasoline. and diesel.

Official data showed a capacity drop of 125,790 barrels per day (bpd) last year on top of the 800,000 bpd drop in 2020.

Leave a Comment