Americans are paying the most expensive Labor Day weekend gasoline prices since 2014. This is amid constrained stock levels and high benchmark crude oil prices.
The end of the U.S. driving season comes in just a few days. This is after OPEC+ ignored the Biden Administration’s call for higher-than-planned increases in the alliance’s oil production. This is in order to ease high gasoline prices and continue supporting the economic recovery.
“President Biden has made clear that he wants Americans to have access to affordable and reliable energy, including at the pump,”.
This is what National Security Advisor Jake Sullivan said last month. He notes that the OPEC+ plan to ease the cuts by 400,000 bpd each month “is simply not enough.”
OPEC+, however, signaled this week that the planned monthly increases are just enough to meet the accelerating recovery despite concerns about COVID variants surging in many economies.
One of the shortest—and most uneventful—meetings of the group in recent months noted that “while the effects of the COVID-19 pandemic continue to cast some uncertainty, market fundamentals have strengthened and OECD stocks continue to fall as the recovery accelerates.”
The White House welcomed the group’s decision.
OPEC+ left its production cuts easing plan unchanged.
“We’re glad that OPEC is continuing gradual increases in oil production, just like they agreed to increase production in July,” a White House spokesperson said, as carried by Reuters, adding that the U.S. continues to engage with OPEC+ on the importance of “doing more to support the recovery.”
Yet, average U.S. gasoline prices at $3.183 a gallon as of September 2 were nearly a dollar higher than last year’s average price at this time, $2.234.
The Biden Administration, like all other U.S. Administrations before that, fears high gasoline prices, which impact consumers’ purchasing power. Those consumers are also voters, who could easily punish an administration with an emotional vote. As early as in next year’s mid-term elections, in which the Democrats have slim majorities in Congress to defend.
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Source: Oil Price
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