President Biden has discussed the latest trends in retail fuel prices with representatives of the U.S. oil industry, Politico has reported, citing unnamed sources in the know.
U.S. gasoline prices hit a new high this month, to an average of $3.26 per gallon as of the start of this week, according to GasBuddy data cited by NBC. In certain states, drivers are paying more than $4 for a gallon of gas, the data also showed.
High prices at the pump are notorious as a voting preference factor, and the Democrats are already preparing for next year's midterm, so they need to act fast to lower prices.
Twice already, the Biden administration has called on OPEC+ to bring more oil to the market, but the cartel has brushed off the calls and is sticking to its disciplined approach to supply increase to keep prices higher.
Now, according to the report, the president has finally decided to reach out to an industry against which much of his political agenda is directed.
"Senior staff is preoccupied with trying to identify options to bring down oil prices, which they believe are driving [the] inflation uptick," Stephen Brown, energy lobbyist and strategist with RBJ Strategies, told Politico. "Some producers will talk to them, but it is also not like they have a lot of friends in this sector."
The latter part is hardly a surprise. When President Biden reached out to OPEC+ earlier this year to ask for more oil, the request prompted a strong reaction from Texas Governor Gregg Abbott, who said in a tweet that Texas oil producers could easily step in and fill the gap if the administration "will just stay out of the way."
Indeed, small independent oil producers are already ramping up production because, according to information from industry insiders, they don't have shareholders to answer to and return cash to, so they can take advantage of the higher prices and boost production. So far, however, this has failed to have any effect on retail gas prices.
If the oil industry decides to help the government rein in prices at the pump, it would not be a favor.
"To ensure we have a stable and affordable supply of energy here in the United States, the Biden Administration should support the domestic production of oil and natural gas, ensure the continued production on federal land, work with the industry on sensible and smart methane regulations, and stop calling for higher taxes on the American oil and gas industry," said the chief executive of the American Exploration and Production Council, Anne Bradbury, as quoted by Politico.
By Irina Slav for Oilprice.com
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