Washington, November 23 (BNA): US President Joe Biden on Tuesday ordered the removal of 50 million barrels of oil from the Strategic Reserve to help reduce energy costs, in coordination with other major energy consuming countries, including China, India and the United Kingdom. .
The move targets global energy markets, but also voters who are dealing with rising inflation and higher prices ahead of Thanksgiving and the winter holidays, the AP reports.
Gas prices are about $3.40 a gallon, more than 50% higher than they were a year ago, according to the American Automobile Association.
There was no apparent impact on the price of a barrel of US crude after Tuesday’s announcement. Prices have been up and down all month, up less than 1% so far in this short holiday week.
Biden has been quick to reshape much of his economic agenda around the issue of inflation, saying his recent $1 trillion infrastructure package will reduce price pressures by making transportation of goods more efficient and cheaper.
The Biden administration has argued that the reserve is the right tool to help alleviate the supply problem. Americans used an average of 20.7 million barrels per day during September, according to the Energy Information Administration. This means that the release roughly equals about two and a half days of additional supply.
The pandemic has made energy markets – like anything else – a struggle on multiple fronts. With the start of the lockdown in April 2020, demand collapsed and oil futures prices turned negative.
Energy traders didn’t want to fall into the trap of crude oil they couldn’t store. But as the economy recovered, prices jumped to a seven-year high in October.
US production has not recovered. EIA figures put average domestic production at about 11 million barrels per day, down from 12.8 million before the pandemic began.
insult