After touching the highest level since 2009 above $130/bbl, oil prices have pulled back sharply over the past two months with both Brent and WTI crude currently trading at sub-$100/bbl, and the Biden administration is gunning for a much bigger drop.
In an interview with Bloomberg, Amos Hochstein, the White House’s senior adviser for global energy security, has said that gas and oil prices need to go even lower while U.S. producers and OPEC+ need to raise output.
As of 13:02 p.m. EST, Brent crude was trading down 3.32% on the day at $97.20, while WTI was down 3.58% at $91.04 in response to a slight output increase announced by OPEC+ and surprise US crude oil inventory build reported by the API.
Hochstein notes this is the 50th day that gasoline prices have gone down in the United States, allowing average national gasoline prices to fall from historic highs above $5 per gallon to $4.16 currently. The energy expert says that it’s remarkable the oil price trajectory has reversed that much amid a war and tight crude supplies but also says the Biden administration will continue trying to bring oil prices even lower.
Also in a new twist, the presidential energy adviser says that U.S. energy companies ought to invest back to increase production here in the United States after posting record profits.
The U.S. energy sector is enjoying one of its most bountiful periods with high oil and gas prices helping the sector post triple-digit earnings growth during the second quarter of the current year. Previously, the Biden administration was strongly opposed to domestic companies growing production, with Biden famously revoking the permit for the Keystone XL pipeline project immediately after he ascended into the Oval Office.
However, Russia’s war in Ukraine, years of underinvestment and high demand have led to unusually tight energy markets leading to sky-high crude and fuel prices. This has forced the Biden administration to make a 180-degree turn on its energy policy, going as far as begging OPEC to ramp up production and also making a historic release of 180 million barrels of oil from the U.S. Strategic Petroleum Reserve.