Oil prices skid as Biden pushes for U.S. fuel cost cuts
By Sonali Paul and Mohi Narayan
(Reuters) -Oil costs dived greater than $4 a barrel on Wednesday amid a push by U.S. President Joe Biden to carry down hovering gas prices, together with stress on the nation’s main vitality companies to assist ease the ache for drivers throughout peak summer season consumption.
By 0425 GMT U.S. West Texas Intermediate (WTI) crude futures have been off lows however nonetheless down $4.04, or 3.7%, to $105.48 a barrel. Equally Brent crude futures dropped $3.87, or 3.4%, to $110.78 a barrel.
As america struggles to sort out hovering gasoline costs and inflation, President Joe Biden is anticipated on Wednesday to name for quickly suspending the 18.4-cents a gallon federal tax on gasoline, a supply briefed on the plan advised Reuters.
“I feel the continuous Biden headlines, with the administration seemingly in inflation panic mode, have performed a component within the newest sell-off as traders hate any uncertainty, even when irrational within the context of the identified provide issues,” mentioned Stephen Innes, managing accomplice at SPI Asset Administration, in a notice.
Seven oil firms are set to fulfill Biden on Thursday, beneath stress from the White Home to drive down gas costs as they make report income.
Chevron Chief Government Michael Wirth, nevertheless, on Tuesday, mentioned criticising the oil trade was not the way in which to carry down gas costs.
“These actions are usually not helpful to assembly the challenges we face,” Wirth mentioned in a letter addressed to Biden, which sparked a response from Biden saying the trade was being too delicate.
Regardless of worries about inflation, demand continues to be on the highway to restoration to pre-COVID ranges and provide is anticipated to lag demand progress, retaining the market tight, as flagged by buying and selling large Vitol and Exxon Mobil Corp this week.
“The market continues to be coming to phrases with the growing disruption to Russian oil. European sanctions have but to kick in,” ANZ Analysis analysts mentioned in a notice, pointing to information displaying that to this point there has solely been a comparatively restricted drop in Russian gas provide to Europe because the battle started.
In the meantime, U.S. oil refining capability fell in 2021 for the second yr in a row, the newest authorities information confirmed on Tuesday, as plant shutdowns saved whittling away at their potential to supply gasoline and diesel.
The official information confirmed a capability decline of 125,790 barrels per day (bpd) final yr on prime of the 800,000 bpd drop in 2020.
(Reporting by Sonali Paul and Mohi Natayan; Enhancing by Kenneth Maxwell)
