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    Too late to help Biden on Thanksgiving petrol prices

    President Joe Biden We are working hard to do something about the ultra-high petrol prices that Americans are facing.But it’s too late to reduce the cost of travel Thanksgiving..

    All eyes on the oil market have turned to Biden to see if his administration announces a liberation from national strategic petroleum reserves to control energy costs. Patrick DeHaan, Head of Oil Analysis at Gas Buddy, said that even if these extra oil barrels hit the market today and plunge futures down, by the time they fully appear in consumer pumps, seven more ~ He said it would take 10 days.

    That is, travelers will get stuck at a high price, just as vacation driving is expected to approach pre-pandemic levels.

    The national retail price of gasoline averages $ 3.41 per gallon, the highest in seven years. NS data. More than 53 million Americans plan to travel on Thanksgiving holidays, with 90% choosing to travel by car.

    “Drivers need to expect pump prices to rise during the holidays,” AAA spokeswoman Devin Gladden said on the phone. “It is unlikely that anything other than an immediate increase in supply will affect prices in time for Thanksgiving.”

    The final release of SPR will have the greatest impact on crude oil, or unrefined oil. It is not yet known how strongly it will affect the price of the pump.

    “Oil has a big impact on gasoline spot prices, but it’s not always a 100% relationship,” said De Haan of GasBuddy.

    Still some success

    But Biden’s approach worked to some extent, despite his negligence.

    Biden had a good month to discuss oil prices, fighting the political consequences of the strongest inflation surge in decades. And for now, it’s working.

    Since late October (when oil prices exceeded $ 85 a barrel and OPEC + resisted his call to launch production faster), Biden has threatened to release oil from U.S. emergency reserves, We are asking bureaucrats to investigate the US oil industry for price gouging and proding. Other oil consuming countries around the world to act. The government even considered export control options.

    Rising gasoline prices pose a political risk to the U.S. president, but Biden added a reason to worry: high energy costs are pandemic, coupled with rising prices for everything from meat and clothing to factory materials and cars. Enacting major social spending laws threatening economic recovery from his abilities.

    What is noteworthy in the fight against the president’s soaring oil prices is that so far the presidential administration has not yet taken any action. Still, speculation about what it would do was enough to stop the rally.

    US crude oil futures have fallen about 7% since October 26, trading at less than $ 80 a barrel on Thursday. Gasoline prices for pumps have remained close to their highest levels in seven years, but have been stable for now. The president won the biggest victory overnight after a virtual summit meeting with Xi Jinping. China -The world’s largest oil importer-has announced plans to open its own strategic petroleum reserves for the second time this year.

    His efforts may help lower prices in the short term. But more importantly, whether the two major countries in the world will work together to influence the oil market for the first time, and OPEC will usher in this joint action for closer cooperation between the world’s two largest oil consumers. It depends on whether to consider it as.

    Robert Johnston, Senior Researcher at the Center for World Energy Policy in Colombia, said: “Will they change their strategy for supply management in the global market? The fact that the US and China are starting to work together will be spectacular, assuming this is not a one-off event.”

    But even if Covid’s resurgence and the stronger dollar this winter bring inflation easing in the short term, it may not be enough at some point. Biden needs to follow through the release of US stockpiles. Otherwise, there is a risk that the trader will call his bluff.

    He can also keep the faucet open or the strategic stockpile will soon be empty. And the coordinated release of strategic stockpiles could encourage OPEC and its partners to curb plans for gradual production increases.

    “With the release of coordinated SPRs by China and the United States, OPEC + could delay the expected continuous increase in production of 400,000 barrels per day,” said Johnston. OPEC + closely assesses whether a release is at risk of returning to a global imbalance. Especially when OPEC + returns to US shale growth and there is a softening of demand due to high prices.

    The overall dynamics of the oil market remain strong. Demand is recovering as the industrial economy booms and travelers fly again. OPEC finds it difficult to achieve its existing plan of modest monthly production increases, and the US shale industry continues to prioritize profits over quantity.

    However, it is difficult to ignore the President of the United States.

    Rebecca Babin, senior energy trader at CIBC Private Wealth Management, estimates that about three-quarters of recent oil price declines are due to the potential SPR release of the Biden administration. John Kilduff, the founding partner of Again Capital LLC, has a similar view.

    “I think half to 3/4 of the SPR release is a pain,” says Kilduff.

    The recent recovery of US oil reserves and the increase in Covid cases have also helped cool the rally.

    When it comes to gasoline, Americans pay an average of about $ 3.40 per gallon on pumps, according to data from the Auto Club AAA. This is the most common since 2014.

    White House Chief of Staff Ronald Crane has blamed the oil industry.

    “Oil prices are falling,” Crane said in a tweet Thursday. “Well, when will the industry collapse? Gas price???? “

    While waiting for concrete action from Biden, oil traders and investors who see the market as undersupply have been tackling violent price volatility with government comments over the past month and a half. Some say that Biden simply buys time and is likely to want prices to ease naturally as trading activity declines during the holidays.

    Michael Tran, Managing Director of Global Energy Strategy at RBC Capital Markets, said: “Market-speaking strategies can have more impact than surprises.”

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    Too late to help Biden on Thanksgiving petrol prices

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    The post Too late to help Biden on Thanksgiving petrol prices appeared first on Eminetra.

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