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Big Oil finally shows restraint, and Biden is pissed




This week, the Najah’s Desert Oasis gas station in southeastern California set up a sign of the times. It said: $ 6.39 for regular. This external fuel pump is not your average gas station, to be sure, and even in the best of times it has the highest gas prices in the country. But breaking the $ 6 mark is a monumental occasion, even for Najahs. In California as a whole, average gas prices are painful and a record $ 4.68 per gallon, and the nationwide average for a gallon of regular gasoline is now $ 3.41 – a full $ 1.29 more than just a year ago. In fact, inflation rates across the country are 31[ads1] years high, and Americans are really feeling the pressure, and many are questioning who to blame for the difficulties.

Although global demand for electricity has returned to pre-pandemic levels, global oil production has not – not in the long run. In the United States, oil production remains 12% lower than in February 2020, just before the impact of the pandemic tore through the oil markets. This is equivalent to pulling all US production in the Gulf of Mexico out of the global economy. And oil and gas production levels have remained low even though the world is suffering from an extreme energy crisis and sky-high fuel prices.

And whose fault is it? Depending on who you ask, the answer is either Vladimir Putin and a geopolitical power play by Russia, Joe Biden and his sinister plans to get rid of fossil fuels and suck US treasuries dry in the process, or OPEC + and their stingy rejection. to respond to the energy crisis unfolding in Europe, Asia and (to a lesser extent) the United States. Now President Joe Biden is pointing the finger at another culprit: the cunning and greedy domestic oil and gas industry. This week, the US president asked federal regulators to open an investigation into the US oil and gas industry to find out if companies are engaging in “illegal behavior“by profiting from consumer pain, citing” increasing evidence of anti-consumer behavior from oil and gas companies. “

“The bottom line is this: gas prices at the pump remain high, even as oil and gas companies’ costs fall,” President Biden wrote this week in a letter to FTC leader Lina Khan. “The Federal Trade Commission has the authority to assess whether illegal behavior costs families at the pump. I think you should do it immediately.”

In fact, the price of unfinished gasoline has fallen more than 5% in the last month. “Usually, this decline will be reflected in pump prices, but instead the gas station sticker shock continues to intensify across the United States.” Big Oil brings in “significant profits from higher energy prices.”

Supports President Biden’s claims, Bloomberg issued a report this week, oil and gas explorers in the usa may point to politics as the reason why they are holding back on increasing production to ease oil prices, but the real reason is much simpler: they are making money hand over fist. According to figures from Deloitte LLP, American oil companies are making more money now than at any other time in the entire history of the country’s slate revolution. “And this may just be the beginning,” Bloomberg Markets wrote. “Free cash flow, the key calculation that investors are looking at, is likely to increase by 38% next year, provided the oil price remains high.”

It has the American Petroleum Institute shot back to President Biden in the wake of his plea to the FTC, saying the move is merely a “distraction from the fundamental shift that is taking place and the bad government decisions that are exacerbating this challenging situation.” An API spokesman went on to criticize Biden’s allocation of his time and energy to fight the domestic oil and gas industry and OPEC +, saying his attention would be better spent on “encouraging the safe and responsible development of US-produced oil”. and natural gas. “

By Haley Zaremba for Oilprice.com

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