This morning’s release from the US Strategic Petroleum Reserve comes after a prolonged period of White House attempts to use the limited tools at its disposal to drive down prices at the pump.
For months Washington has been calling on Opec to boost its crude production to drive down prices.
Last week, President Joe Biden called for an investigation into “potentially illegal conduct” by ExxonMobil and Chevron.
Still, the Biden administration was feeling the heat over high gasoline prices and its impact on surging inflation — even if the blame was unfairly pinned on the president.
Oil prices had in fact begun to drop off amid growing Covid-19 cases in some parts of the world. Before Tuesday’s release, they were down nearly $10 a barrel from their recent highs earlier this month.
But pressure on the administration to take action remained high. Hence this morning’s move.
As we discussed in ES a number of weeks back, while an SPR release — in conjunction with a handful of other countries — might be the most potent tool at Biden’s disposal to put a dent in prices, many analysts reckoned it wouldn’t be that effective. Any drop in prices would probably be short-lived.
Oil prices actually rose this morning, with international marker Brent crude and US marker West Texas Intermediate both up over 1 percent.
By Tom Whipple