President Biden Faces Few Options To Lower Oil Prices Without OPEC
President Biden has limited options to counter OPEC-plus ignoring White House pleas to produce more oil and soften the price rally. Some strategies, like releasing oil from strategic reserves, could even backfire and further lift prices. The administration says all options are on the table to keep domestic gasoline prices rising further, as benchmark crude pushes back over $80 a barrel. But the U.S. gripes with OPEC only highlight the White House’s inability to impact oil prices in the short term.
Oil settles mixed on tight inventories, demand worries
Oil prices settled mixed on Tuesday, as prospects of tight inventories worldwide were offset by forecasts of a production increase in coming months and concerns over rising coronavirus cases in Europe. Brent crude rose 38 cents, or 0.5%, to $82.43 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 12 cents, or 0.2%, to $80.76 a barrel.
IEA sees a potential reprieve for soaring oil prices as U.S. ramps up production
The International Energy Agency said on Tuesday that soaring oil prices could soon turn lower as the U.S. leads a rebound in global supply. Oil prices have soared above $80 a barrel over the last few weeks, hitting their highest level in seven years, as demand outstripped supply. The momentum behind the price rally has even tempted some forecasters to predict a return to $100-a-barrel oil, although not everyone shares this view.
Oil price relief could be “on the horizon”
The global oil market remains tight but “a reprieve from the price rally could be on the horizon” as U.S. production rises, the International Energy Agency said on Tuesday. Why it matters: Its latest monthly analysis comes as elevated oil — and hence gasoline — prices are another political headache for President Biden amid broader inflation. Driving the news: IEA’s report doesn’t change its global demand growth forecasts for 2021 and 2022 but notes significantly rising supplies despite OPEC+ sticking with modest production increases.