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The national average U.S. gasoline price barely moved on the day after the United States announced on Tuesday a release of 50 million barrels of oil from the Strategic Petroleum Reserve intended to lower the highest gasoline prices in America in seven years.
On the following day, Wednesday, November 24, the national average was $3.398 per gallon of gasoline, down by less than one cent from the $3.403 average price on Tuesday, according to data from AAA. To compare, at this time last year, the average price of gasoline in the U.S. was $2.110 per gallon.
According to data from fuel-savings platform GasBuddy, the national average retail price of gasoline was $3.427 a gallon on Wednesday morning as of 8:40 a.m. EST, up by 1.0 ¢ from Tuesday’s average of $3.417. The national average price was close to the highest average on this day – $3.430 in 2012, GasBuddy’s data showed.
US President Joe Biden said on Tuesday that the Department of Energy would release 50 million barrels of oil from the SPR in a bid to lower high gasoline prices in a coordinated effort with other major oil-consuming nations.
The move underwhelmed the market, which was for the most part, already expecting an SPR release. Oil prices erased losses and jumped on Tuesday morning following the announcement.
Related: OPEC+ Reacts To Biden, May Not Raise Oil Production In December
Most of the SPR release will take place within a period of several months, for the 32 million barrels of the 50 million, which will be released in the form of exchange. This crude oil will have to be returned in calendar years 2022, 2023, and 2024 at a premium, Warren Patterson, Head of Commodities Strategy at ING, notes.
The rally in oil prices this year, due to the rebound in demand, has led to the highest gasoline prices in America since 2014, and President Biden has been eager to have those prices lowered as high gasoline prices typically go with poor approval ratings for a sitting U.S. president.
After OPEC+ has continuously ignored calls from the U.S. Administration to pump more oil than planned, President Biden announced the SPR release, which analysts say will not have a direct immediate effect on gasoline prices.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com