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White House: No Oil Producer Should Hold Back Supply As Oil Hits $90

No oil producer around the world should hold back supply when demand is rising, the White House says as oil hit $90, noting that the U.S. Administration has left “all options on the table” to address high oil and gasoline prices and could use every legal and regulatory tool available.

“Nobody should hold back supply at the expense of the American consumer, particularly as the recovery from the pandemic continues, and oil producers around the world have the capacity to produce at levels that match demand and reduce the high prices. That is what we are going to continue to convey,” White House Press Secretary Jen Psaki said on Tuesday.

The Biden Administration is holding talks with oil-producing countries about proposed production increases, while with oil-consuming countries, the U.S. is talking about releases from strategic reserves, Psaki added.

The U.S. announced one release of 50 million barrels of crude from the Strategic Petroleum Reserve (SPR) in November in a bid to lower high gasoline prices in a coordinated effort with other major oil-consuming nations.

After a correction due to the initial market panic about the Omicron variant, oil prices returned to rally and have gained around 20 percent since the start of the year. WTI crude prices hit $90 a barrel last week, for the first time since 2014, and sent American gasoline prices higher.  

On Wednesday, the national average price of regular gasoline was $3.469 a gallon, AAA data shows—that’s the highest since 2014 and $1 a gallon higher than this time last year.

Apart from talks with oil-producing and oil-consuming nations, the U.S. is “looking at every legal and regulatory authority we have available to ensure consumers are protected,” Psaki said on Tuesday. 

“That means responding to any sign of manipulation in the oil commodities markets or gauging [gouging] at the pump,” the press secretary added.


By Tsvetana Paraskova for Oilprice.com

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  • Ryan on February 10 2022 said:
    What this US administration doesn’t realize is they caused most of this. Cancel Keystone where the oil is from the best producing nation with stringent regulations. An election promise to crush the industry and throwing insults to any O&G producers. Supporting the green movement under the table and Joe has to plead now. Did you not know about a labor shortage? Supply chain shortage, companies operating properly and paying down debt and returning capital to depleted investors. And now you crave oil from some of the worst countries who have very little respect for human rights There is no easy fix Jenny and Joe
  • Mark Konwiczka on February 09 2022 said:
    Maybe our president should give the oil companies a list of how they could increase production as he shuts down oil pipelines. Then he could discuss the great controversy over vanilla or chocolate ice cream.
  • Mamdouh Salameh on February 09 2022 said:
    US President Biden is issuing threats left and right as if the United States is still the absolute master of the world not realizing that the world has changed substantially during the last two decades from a unipolar world to a multipolar one.

    During a meeting at the White House on Monday with Germany’s Chancellor Olaf Scholtz, he threatened to stop Russia’s Nord Stream2 gas pipeline if Russia invades Ukraine.

    And today he repeated his threats to OPEC+ if it doesn’t raise its oil production noting that his administration has left “all options on the table” to address high oil and gasoline prices and could use every legal and regulatory tool available.

    First the proliferation of threats is a sign of weakness and second they are unenforceable. He wants OPEC+ to raise its production to help reduce domestic gasoline prices not allowing for the possibility that OPEC + may neither have enough spare capacity to raise prices more than it is already doing nor the intention to push the global oil market to glut. He also forgets that the United States under his predecessor encouraged US shale oil companies to produce recklessly and deliberately undermine OPEC+ policies to keep the global oil market balanced thus causing prices to crash and threatening the livelihood of its members.

    President Biden is worried that continued high gasoline prices could threaten his re-election for a second term and also threaten a major loss by his Democratic party in the November Congressional elections.

    President Biden can’t swim against the tide. Therefore, he should sit tight and let the oil price surge take its course. May be he should ask US shale oil companies to come to his help but is afraid to expose the highly touted comeback of US shale oil production as an illusion.

    Moreover, the options, he says, are on the table to address high oil and gasoline prices will prove futile and toothless in the face of a global oil market already in a super-cycle phase that could last ten years and could take Brent crude to $120 a barrel in the next few years. In fact, high oil prices are here to stay well into the future.

    There is one last option he can resort to. Through history, the United States has started wars when its economy was in trouble. Biden could, therefore, use the Ukraine crisis to provoke Russia. But he knows that President Putin will never back down under pressure and Biden will find himself squeezed into a corner so either he backs down himself or faces a nuclear war.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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