Gas supply and demand hitting prices, not ‘pandemic profiteers,’ as Biden claims

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AAA. As of now, gas prices are sitting at $3.19 per gallon.

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Gasoline prices have been rising since President Biden came to power, and angry voters want to know why.

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Could it be record-breaking gasoline demand, or perhaps energy policies by the Biden administration that discouraged the production of fossil fuels, or could it be “pandemic profiteering”? The president thinks it’s the latter.

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Rise in NAT gas prices means higher heat bills in winter

“We are also leaving behind bad actors and pandemic profiteers on our economy. There is a lot of evidence that gas prices should come down, but it didn’t,” he said during a briefing on Thursday. “We’re keeping a close eye on that.”

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White House scramble to counter rising prices

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Energy experts are eager to see what he finds, because most, including me, with 30 years of experience observing objects, doubt there is any evidence.

Before I get into the finer-grained statistics, one thing you need to remember about gasoline prices is that they are primarily driven by supply and demand. Ever since Joe Biden has been president, demand for gasoline has grown faster than supply. The second thing you have to remember about gasoline prices is that they are heavily influenced by the cost of crude oil, which is the biggest factor driving gasoline prices. The Energy Information Administration says that 55% of what you pay for petrol is equal to the price of crude oil.

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So… if the president, for example, cancels a pipeline or puts a drilling moratorium on oil on federal land, less oil will be available. Less supply translates to higher gasoline prices, especially if demand is increasing. When Biden took office on Jan. 20, West Texas Intermediate crude was priced at $53.24 a barrel this week, before retracing modestly to $71-a-barrel levels on Friday, before hitting $73-a-barrel levels. level reached.

$3+ Gasoline Prices 2021 Theme

And the demand for petrol increased. US gasoline demand hit a record high on the fourth day of the July holiday weekend, the traditional peak of the summer driving season. That pushed gasoline prices to a seven-year high of $3.13 a gallon, a dollar higher than the day Biden took office. today it is sitting $3.19 per gallon, per AAA.

Additionally, after Labor Day, we eliminate so-called summer blends of gasoline, which tend to be more expensive. When you drop, gasoline blends are cheaper and demand for gasoline generally drops after Labor Day. This will usually lower the prices at the pump.

Yet that’s not happening this year, mainly because of the effects of Hurricane Ida and Tropical Storm Nicholas, both of which have taken a huge toll on US oil production and refiners making gasoline. The EIA has reported that Ida bypassed 96% of all crude oil production in the Gulf of Mexico, which is desperately needed to produce gasoline, as well as closing nine refineries and reducing production. So if you can’t produce that much petrol or you can’t get your hands on the crude oil needed to make petrol, the prices will be more expensive.

The second reason that gasoline prices have risen so dramatically is that Biden, as leader of the free world, has actively discouraged investment in fossil fuels. Even the International Energy Agency said a few months ago that the world needs to stop all investment in fossil fuels if it is to meet Biden’s climate goals, now acknowledging that The lack of investment in conventional fossil fuels is already being felt. higher prices.

Biden, who has made climate change one of his key issues as president, is sending a signal to global energy producers to hang on to their dollars and not invest in fossil fuels, and many other investors are listening.

US oil production is a big part of the global shortage issue as our crude oil output is 3 million barrels a day less than in 2020. Those numbers would have grown more quickly if it weren’t for the Biden administration’s fossil fuel investment stance.

If the Fossil Free Finance Act becomes law, the lack of fossil fuel investment is going to get worse. Mondair Jones, D.Y., along with Democratic Reps Ayana Pressley, Mass., and Rashida Tlaib, Michigan, would amend the Bank Holding Companies Act to require the Federal Reserve to mandate through regulation. Or guidance, that all bank holding companies with assets of more than $50 billion align their financing of items at risk of greenhouse gas emissions and deforestation with science-based emissions targets.

Read more about Granthshala Business by clicking here

Phil Flynn is a senior energy analyst and Granthshala Business Network contributor at Price Futures Group. He is one of the world’s leading market analysts, providing individual investors, professional traders and institutions with up-to-the-minute investment and risk management insights into the global petroleum, gasoline and energy markets. His accurate and timely forecasts have become highly sought after by industry and media around the world and his impressive career spans nearly three decades, gaining attention with his market calls and energetic personality as the author of The Energy Report. . You can contact Phil by phone at (888) 264-5665 or by email [email protected].


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