Oil prices are back at levels of $102.5-$105 a barrel due to plans announced by US President Joe Biden to release up to 180 million barrels over the next six months. This oil should come from the US Strategic Petroleum Reserve (SPR).
“Our prices are rising due to Putin’s actions. There is not enough supply. And the solution is if we want lower gas prices, we need to have more oil inventories right now,” Biden said. He called these 180 million barrels a “bridge of war”. Gasoline prices rose to a record high of $4.33 a gallon in early March in the United States, following the Russian invasion of Ukraine. But prices have risen almost twice over the past year after demand for oil soared.
Fifty million barrels were delivered to world markets at the end of 2021, and this did not lead to lower prices in the medium term, let alone in the long term. As prices fell from the $80+ zone to a low of $65.7 in late November, strong demand for fuel caused prices to rebound. Brent prices hit $90 in mid-January before the start of the Russian-Ukrainian war, comments Esperio analyst Alex Boltyan.
As a result, oil and gasoline prices are expected to rise in the coming weeks, even as the amounts of reserves used are unprecedented. Total world consumption is close to 100 million barrels and one million barrels per day would surely be lost in this global sea of daily oil demand. This could have a temporary impact on gasoline prices in the United States, oil production peaked at around 12.3 million barrels per day during the Trump era and is now nearly a million lower barrels per day due to the Democratic leadership’s bespoke policy to reduce the carbon footprint.
The US Department of Energy (EIA) forecasts the country’s average annual oil production to increase to 11.8 million barrels per day in 2022 and 12.4 million barrels per day in 2023, still below 12, 97 million barrels per day in November 2019.
Consequently, the United States has little to offer in terms of increased production for the global oil piggy bank, so much so that Biden’s rhetoric that “nations unite to rob Putin of the ability to weaponize energy resources against families Americans and democracies around the world “sounds more like a simple statement, although some European countries may actually buy into the US strategy. Again, Joe Biden noted that the United States- United would subsequently stock up on barrels when oil prices were lower.
Biden also called on U.S. oil companies to make increasing production their top priority because “if we want lower gas prices, we need to have more oil inventories right now.” He also blamed his domestic oil producers because “they have been indiscriminate, lavishing excessive profits on investors with payouts and buyouts.” The president has called on Congress to establish new rules for producers to pay taxes on wells they haven’t used in recent years and on acres of public land they acquire without producing, an official said. American at CNN.
However, the whole situation is said to be the result of the White House’s refusal to issue new permits for land with shale or oil-rich fields, when most of the old land, which the companies are not using, is not not profitable, according to Republican experts at Fox News. commented on a popular Tucker Carlson show. Either way, most of the business community is now wondering if Biden’s speech will affect Chevron, Exxon Mobil and other US oil companies in any way.
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