Biden to announce emergency oil sales to avoid price hikes

WASHINGTON, October 18 (Reuters) – U.S. President Joe Biden will unveil on Wednesday his plan to sell the last portion of the nation’s emergency oil reserve release by the end of the year, detailing his strategy to replenish stocks when prices drop. aforementioned.

The plan aims to add enough supply to prevent oil price spikes that could hurt consumers and businesses, while also reassuring the country’s drillers that the government will enter the market as a buyer if prices drop too low.

Biden’s efforts to use federal powers to stabilize the U.S. oil market underscore how war and hyperinflation in Ukraine upset the plans of a president who has pledged to reinstate the oil industry and quickly shift the country to fossil fuels. will come free.

Register now for FREE unlimited access to Reuters.com

It also shows the administration’s desire to keep inflation in check, especially in the weeks before the November congressional election, when Biden’s Democrats hope to keep control of Congress.

Earlier this year, Biden decided to sell 180 million barrels from the Strategic Petroleum Reserve (SPR) to combat the potential supply crisis caused by sanctions on oil-rich Russia after it invaded Ukraine in February.

While the initial plan was to end these sales in November, purchases were slower than expected during the summer and around 15 million barrels were not sold.

A senior management official said they would be put out to tender for delivery in December and extra oil could be procured if needed.

U.S. President Joe Biden called for a federal gas tax holiday on June 22, 2022 when speaking about gas prices in a speech at the South Court Auditorium of the Eisenhower Executive Office Building in the White House in Washington. REUTERS/Kevin Lamarque

“The President will be careful to announce today that everything we do today can continue and see additional SPR broadcasts if needed,” Amos Hochstein, senior energy adviser to the US, said Wednesday. Said.

“The President will also announce that we will renew SPR,” he said in an interview with CNN.

The senior management official said Biden will come up with a plan to replenish the emergency reserve in the coming years, but only at prices in the $67 to $72-per-barrel range or below for US oil benchmark West Texas Intermediate.

“There is no threat of an imminent oil collapse,” Hochstein later said on CNBC.

Biden’s hope is to send a signal to both consumers and producers.

“It urges the private sector in the United States to do two things. One is to get this signal to increase production, increase investment, and second, to make sure if they are getting these profits, if they are getting it. By taking advantage of these markets, they continue to give the consumer a fair price,” he said.

In recent weeks, the oil industry has been increasingly concerned that the administration may take drastic action, such as banning or limiting exports of gasoline or diesel, to help restore falling US inventories. They called on the administration to remove the option from the table, a move the authorities did not want to make.

“We’re keeping all the tools on the table, you know, anything that could potentially help ensure stable domestic supply,” the official said.

Register now for FREE unlimited access to Reuters.com

reporting by Jarrett Renshaw and Steve Holland, additional reports by Doina Chiacu; Editors Lincoln Feast, Heather Timmons and Lisa Shumaker

Our Standards: Thomson Reuters Trust Principles.

.

Leave a Comment

Your email address will not be published.