<mediadc-video-embed data-state="{"cms.site.owner":{"_ref":"00000161-3486-d333-a9e9-76c6fbf30000","_type":"00000161-3461-dd66-ab67-fd6b93390000"},"cms.content.publishDate":1664994563751,"cms.content.publishUser":{"_ref":"00000172-336d-d668-a372-3bef83ff0002","_type":"00000161-3461-dd66-ab67-fd6b933a0007"},"cms.content.updateDate":1664994563751,"cms.content.updateUser":{"_ref":"00000172-336d-d668-a372-3bef83ff0002","_type":"00000161-3461-dd66-ab67-fd6b933a0007"},"rawHtml":"
var _bp = _bp||[]; _bp.push({ "div": "Brid_64994545", "obj": {"id":"27789","width":"16","height":"9","video":"1108747"} }); ","_id":"00000183-a968-d5ca-a5d7-ff6ed1b10000","_type":"2f5a8339-a89a-3738-9cd2-3ddf0c8da574"}”>Video EmbedThe Biden administration is reliving its summer energy price woes with gas prices back on the rise and a global oil cartel again flouting President Joe Biden’s interests just ahead of the midterm elections, putting even more pressure on prices.
Biden was blessed with 14 consecutive weeks of falling retail fuel prices just when he needed the help to buttress his struggling poll numbers and pad Democrats’ chances for the November midterm elections.
WHAT TODAY’S OIL MARKET EVENTS MEAN FOR THE WAR IN UKRAINE AND THE MIDTERMS
Now, OPEC+ is preparing to reverse course and scale down its daily production after having increased production targets each month since the summer of 2021, leading to estimates that oil may inch back up to $100 through the end of the year.
High gas prices have dominated Biden’s attention for much of the last year, and the issue began commanding even more attention after the war in Ukraine tripped oil markets and sent crude prices well above $100 for months on end.
Gas prices rose steeply right alongside, reaching a national average of $5.016 per gallon on June 14, a record price before adjusting for inflation, before embarking on a precipitous drop thanks to falling crude prices.
Until the week ending Sept. 19, the nation’s average gas price had fallen every week since late June, according to retail fuel price tracker GasBuddy. The trend has now reversed due to rising prices, particularly in Western states, including California, Oregon, and Nevada, where increases have been sizable enough to outweigh continued drops in other states when they’re all averaged up.
The average retail gas price in California was $6.425 as of Wednesday, nearly double the average price in every state along the Gulf Coast.
The Biden administration has been trying to get in front of the rising prices, knocking the biggest energy companies for pocketing healthy earnings, propped up by record refined product exports, while consumers struggle with high prices.
High prices have been a major issue all year long. Biden’s job approval ratings fell to 33% among registered voters but have since inched up as gas prices have fallen. The RealClearPolitics average shows Biden’s approval near 43% now.
Energy Secretary Jennifer Granholm and senior White House officials met with top refiners on Friday, which include the likes of ExxonMobil, Chevron, and BP, after she’d asked them in August to reduce exports voluntarily to build up domestic inventories. Her post-meeting statement reflected continued displeasure with the industry.
“If companies like ExxonMobil continue to believe that ‘free market incentives remain the most efficient way for the industry to address these problems,'” Granholm said, quoting Exxon CEO Darren Woods, “they need to step up and show results for American consumers and the American economy.”
Refiners and their lobbyists have insisted the global market needs their products to shore up overall supply, also arguing that U.S. product exports can help displace the influence of Russia, the world’s second-largest oil exporter.
Industry players have also pointed to refinery constraints limiting the amount of gas, diesel fuel, and other products that refiners can manufacture to meet demand. The United States has lost around 1.1 million barrels per day of refining capacity over the last two years.
The other major setback for Biden, bringing the administration back at loggerheads with OPEC, is a decision the cartel and its nonmember partners made to reduce oil production targets just a few months after Biden traveled to Saudi Arabia, in part to convince the leading producer to produce more.
OPEC+ agreed Wednesday to cut production by 2 million barrels per day, a decision made after consistently increasing its monthly production targets for more than a year, to shore up the lower crude oil prices that have fallen in recent weeks largely on recession concerns.
The producer group made the decision “in light of the uncertainty that surrounds the global economic and oil market outlooks, and the need to enhance the long-term guidance for the oil market,” it said in a statement.
In addition to putting upward pressure on prices, the move is a direct lifeline to Russia insofar as it increases oil prices. Russia’s oil sector is struggling under Western sanctions, including an impending European embargo on most Russian oil imports. It’s also staring down a Group of Seven-led oil price cap that, at least in theory, will cut even further into its revenues.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
The White House, which along with Group of Seven partners pressured OPEC+ to increase production more aggressively when prices were at their highest earlier in the year, said Wednesday that OPEC+’s decision was a “shortsighted” one.
“At a time when maintaining a global supply of energy is of paramount importance, this decision will have the most negative impact on lower- and middle-income countries that are already reeling from elevated energy prices,” said White House national security adviser Jake Sullivan and National Economic Council Director Brian Deese.
