Updates of the oil and gas industry
Sign up for myFT Daily Digest to be the first to know about the news from the oil and gas industry.
The White House has called on Opec to increase oil production in a bid to curb high gasoline prices, which the Biden administration said “risk damaging the ongoing global recovery.”
Jake Sullivan, Joe Biden’s national security adviser, said in a statement Wednesday that while Opek and his allies “recently agreed production is increasing“The boost” will not fully compensate for previous production cuts imposed by Opec + during the 2022 pandemic. “
“At a critical moment in the global recovery, this is simply not enough,” Sullivan added, saying the United States was “committed to relevant Opec + members on the importance of competitive markets in setting prices.”
U.S. gasoline prices have risen along with growing demand for motor fuels as the U.S. economy reopened after a coronavirus-related blockade. Gasoline sells for an average of $ 3.19 a gallon nationwide, up nearly 50 percent from the same time last year, according to the AAA, the automobile association.
The highest recorded average price for the country was more than $ 4.10 per gallon in 2008.
International oil prices softened by about 1% on the news, with Brent trading just under $ 70 a barrel and West Texas Intermediate, a benchmark for the United States, at about $ 67.50.
The White House’s intervention marked a sharp departure from Donald Trump’s policies during last year’s collapse of the oil market, when he pushed Opec to raise prices in an attempt to help US shale companies overcome one of the worst market downturns in decades.
But the latest pivot is a return to the average for US administrations – including Trump – who have often called on the Opec cartel to pump more oil to lower gasoline prices.
George H. W. Bush, Bill Clinton, and George W. Bush pressured the group of producers for more supplies during periods of rising gasoline prices or U.S. military intervention in the Middle East.
Trump, who frequently tweeted during OPEC meetings and accused the group of “manipulating” oil prices and kidnapping Americans, struck a deal with Saudi Arabia in 2018 to increase oil production just before the United States withdrew from the nuclear deal. Iran has imposed sanctions on the oil industry. He then leaned on Opec to make his deepest cuts in 2020.
Opec layoffs and vaccine breaches late last year helped raise oil prices to more than $ 70 a barrel, although analysts are increasingly concerned that a revival of the coronavirus could hamper a recovery in global oil demand. scale.
The Opec + Group, including the United Arab Emirates, Saudi Arabia, Russia, Iraq and Kuwait, last month has agreed to increase production by about 2 million barrels per day, or over 2% of world demand, by the end of 2021 and to restore all supplies it reduced last year by the end of 2022.
Opec declined to comment in response to Sullivan’s statement Wednesday.
The White House also released a letter Wednesday from Brian Deese, director of the National Economic Council, to Lina Khan, the new chairman of the Federal Trade Commission, calls on the FTC to take action against any secret agreements in the US gasoline market.
Deese called on the agency to “consider using all available tools to monitor the US gasoline market and to address any illegal behavior that could contribute to rising prices for pump users.”
“Although many factors can affect gas prices, the president wants to ensure that consumers do not pay more for gas due to anti-competitive or other illegal practices,” he wrote.
White House interventions came hours after Democrats in the Senate pushed extensive budget resolution of 3.5 trillion. dollars along party lines in a vote of 50-49, without Republican support. Republicans have accused Democrats of reckless spending, which they say is raising the prices of American consumers, including the pump.
The latest data from the Bureau of Labor Statistics, published on Wednesday, shown The rapid rise in US consumer prices remained at a 13-year high in July, with the CPI rising 5.4% last month from a year ago.
On Tuesday, 19 Republican senators signed a separate bill on infrastructure costs for 1 trillion. The dollar, which was considered a significant achievement for the Biden administration.
The oil industry and its allies have been quick to criticize Biden’s request as incompatible with his actions to curb domestic production of fossil fuels, such as attempt to pause on federal oil and gas leasing sales.
“Asking the Saudis to increase production while the White House ties one hand behind the backs of US energy companies is pathetic and shameful,” said John Cornin, a Republican senator from Texas.