Released June 03, 2022 | SUGAR LAND
en
Researched by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Without much left to do on domestic energy policy, the U.S. president is widely expected to make pleas for more oil during an upcoming visit to allies in the Persian Gulf.
Wednesday's national average retail price of $4.67 for a gallon of regular unleaded gasoline in the U.S. set a record. The record was beaten--yet again--on Thursday, with prices climbing to a new all-time high of $4.71 per gallon, according to travel club AAA.
We noted Wednesday that mounting inflation, compounded by the rally in commodity prices that greeted the Russian invasion of Ukraine, could eventually lead to recession as consumers exhaust their savings on everything from fuels to groceries, and demand destruction sets in. First quarter GDP came in negative, and consumer savings are at their lowest level since the Great Recession in 2008.
For more information, see June 2, 2022, article - Travel Demand Holding Up, Despite High Gasoline Prices.
In an election year that's already been clouded by a steady string of mass shootings and prospects that federal abortion rights will be overturned, President Joe Biden, a Democrat, cannot afford to let the economy slip much further if he wants to hold sway over the national conversation come 2023.
Caught on its back foot after embracing the so-called energy transition, this administration since the onset of the war in Ukraine has pursued multiple courses of action to try to arrest the steady climb in commodity prices, but few efforts have worked. Those commodity prices account for about half of the inflation in the U.S. economy.
So, it's off to the Middle East to try to persuade Gulf allies to open the spigot. Should the president head to Riyadh, it would be hat-in-hand policy, given the Biden administration's stance on de facto Saudi ruler Prince Mohammed bin Salman, known as MbS.
The U.S. president vowed to turn the tables on foreign policy following the death of Washington Post columnist Jamal Khashoggi, ostensibly on orders from the crown prince himself. Biden had vowed to turn Saudi Arabia into a "pariah" over the slaying, but strange bedfellows are made in times of need.
His trip, meanwhile, could spark outrage at home amid those--largely in the Republican camp--calling for energy independence. Some U.S. lawmakers say vast domestic reserves of oil and natural gas could free the U.S. from dependence on foreign regimes such as Saudi Arabia or Russia.
But barring an ill-advised return to the era when U.S. crude oil exports were prohibited, private-sector energy companies will play the market, rather than follow some benevolent path toward isolation.
Or it could all be for naught. A decision from the European Union to phase out most of its waterborne crude oil imports from Russia by year's end means there's a sizable mismatch between supply and demand. While demand inevitably will fade, it's still holding up and supporting commodity prices.
That leaves it to the supply-side players with state control over oil, and they responded. Faced with a major void of Russian crude oil, members of the Organization of the Petroleum Exporting Countries (OPEC) opted for another 650,000 barrels per day (BBL/d) come July, up from its normal allotment of 400,000 BBL/d.
U.S. crude oil prices were more or less flat following the news, however. With recessionary alarms already sounding, it remains to be seen if the ravages of war will continue to put strains on commodity prices and the health of the global economy in general.
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
Wednesday's national average retail price of $4.67 for a gallon of regular unleaded gasoline in the U.S. set a record. The record was beaten--yet again--on Thursday, with prices climbing to a new all-time high of $4.71 per gallon, according to travel club AAA.
We noted Wednesday that mounting inflation, compounded by the rally in commodity prices that greeted the Russian invasion of Ukraine, could eventually lead to recession as consumers exhaust their savings on everything from fuels to groceries, and demand destruction sets in. First quarter GDP came in negative, and consumer savings are at their lowest level since the Great Recession in 2008.
For more information, see June 2, 2022, article - Travel Demand Holding Up, Despite High Gasoline Prices.
In an election year that's already been clouded by a steady string of mass shootings and prospects that federal abortion rights will be overturned, President Joe Biden, a Democrat, cannot afford to let the economy slip much further if he wants to hold sway over the national conversation come 2023.
Caught on its back foot after embracing the so-called energy transition, this administration since the onset of the war in Ukraine has pursued multiple courses of action to try to arrest the steady climb in commodity prices, but few efforts have worked. Those commodity prices account for about half of the inflation in the U.S. economy.
So, it's off to the Middle East to try to persuade Gulf allies to open the spigot. Should the president head to Riyadh, it would be hat-in-hand policy, given the Biden administration's stance on de facto Saudi ruler Prince Mohammed bin Salman, known as MbS.
The U.S. president vowed to turn the tables on foreign policy following the death of Washington Post columnist Jamal Khashoggi, ostensibly on orders from the crown prince himself. Biden had vowed to turn Saudi Arabia into a "pariah" over the slaying, but strange bedfellows are made in times of need.
His trip, meanwhile, could spark outrage at home amid those--largely in the Republican camp--calling for energy independence. Some U.S. lawmakers say vast domestic reserves of oil and natural gas could free the U.S. from dependence on foreign regimes such as Saudi Arabia or Russia.
But barring an ill-advised return to the era when U.S. crude oil exports were prohibited, private-sector energy companies will play the market, rather than follow some benevolent path toward isolation.
Or it could all be for naught. A decision from the European Union to phase out most of its waterborne crude oil imports from Russia by year's end means there's a sizable mismatch between supply and demand. While demand inevitably will fade, it's still holding up and supporting commodity prices.
That leaves it to the supply-side players with state control over oil, and they responded. Faced with a major void of Russian crude oil, members of the Organization of the Petroleum Exporting Countries (OPEC) opted for another 650,000 barrels per day (BBL/d) come July, up from its normal allotment of 400,000 BBL/d.
U.S. crude oil prices were more or less flat following the news, however. With recessionary alarms already sounding, it remains to be seen if the ravages of war will continue to put strains on commodity prices and the health of the global economy in general.
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
