President Joe Biden apparently has a plan in the works to either reverse gas prices that have jumped an average of 13 cents in the last week.
The president noted that gas prices have dropped by about $1 per gallon since the beginning of summer, “But the price of gas is still too high, and we need to keep working to bring it down. I’ll have more to say about that next week.”
He provided no specifics while talking to a group in Los Angeles about bipartisan infrastructure investments, but it’s possible further releases from the U.S. Strategic Petroleum Reserve could play a role. White House officials have offered no formal comment about what action the president is considering.
OPEC causing price spike
Gas prices have risen an average of 13 cents a gallon in the last week in the wake of OPEC’s announced plans to cut production between 500,000 and 2 million barrels daily in the weeks ahead. The move caused the price of crude oil to rise immediately.
Prices of gas in the U.S. are hovering around an average of $3.90 a gallon, according to AAA, on Friday. That’s a small improvement from the start of the week when the group reported the average was $3.91 a gallon.
Biden quickly responded to the OPEC announcement, criticizing the group and vowing “consequences” for the action, but not revealing what those consequences will be. He’s said since then he’s reviewing the options available without offering specifics about what could be done.
Senior Biden administration officials have suggested imposing export limits in an effort to shore up fuel stocks and bring relief to consumers, Bloomberg reported, adding the move could backfire, according to economists and energy experts, and lead to higher prices in New England and on the West Coast.
OPEC’s impact
The national average is up 22.5 cents from a month ago and 67 cents per gallon higher than a year ago., according to GasBuddy.com. The national average price of diesel has risen 18 cents in the last week and stands at $5.04 per gallon.
“With OPEC+ deciding to cut oil production by two million barrels a day, we’ve seen oil prices surge 20%, which is the primary factor in the national average rising for the third straight week,” said Patrick De Haan, head of petroleum analysis at GasBuddy, in his blog earlier in the week.
“Some of the refinery snags that have caused prices to surge in the West and Great Lakes appear to be improving, with prices in those two regions likely to inch down, even with OPEC’s decision, as the drop in wholesale prices has offset the rise due to the production cut. But where gas prices didn’t jump because of refinery issues, they will rise a total of 10-30 cents due to oil’s rise, and some areas are certainly seeing the jump already. For now, I don’t expect much improvement in prices for most of the country, with California and the Great Lakes as the exception, with downdrafts likely in the days and weeks ahead.”