The U.S. is facing its worst inflation since 1981, with poor economic performance and record oil prices pushing Biden’s average approval rating to a record low.
Biden’s average domestic approval rating is 38.8 percent, and 56.9 percent of Americans are dissatisfied with his performance, according to data from the U.S. polling data aggregation site RealClearPolitics on Wednesday. The approval rate was 43.3%. The American people have expressed dissatisfaction with the Biden administration on a series of issues such as the economy, violent crime, immigration, etc., and the first one is the price of oil and gas.
It’s not just that the people have lost confidence in this administration, the Biden administration itself doesn’t seem to be very confident.
On Wednesday, June 29, Eastern Time, according to media reports, the Biden administration has begun to analyze and simulate what kind of damage it will cause to the economy when the international oil price reaches $200 per barrel, as the media commented:
Economic officials are not looking at managing an economy that is in its natural evolution, moving from a recovery into a period of steady growth, but analyzing and simulating a worst-case scenario, such as what a shock to oil prices to $200 a barrel might mean for the economy .
Biden’s efforts to contain oil prices are actually quite a lot, but they are rarely effective. From releasing the Strategic Oil Reserve (SPR), imitating the UK in imposing a windfall profit tax on the oil and gas industry , bowing his head and preparing to visit the Middle East to meet the Saudi Crown Prince , to writing letters to “threatened” major oil companies to take responsibility and cooperate with government actions to reduce oil prices , etc. Oil prices continue to be high, and the situation is likely to get worse.
The belated eia data on Wednesday showed that with the continuous release of strategic oil reserves, U.S. crude oil inventories fell by 2.76 million barrels; crude oil inventories in the Cushing area continued their downward trend for several weeks, falling by 782,000 barrels, and the inventory fell to A new low since October 2014; gasoline inventories unexpectedly increased by 2.65 million barrels; distillate inventories unexpectedly increased by 2.56 million barrels; refinery capacity utilization rose 1%.
The U.S. Department of Energy said on Monday that it released 6.9 million barrels of crude oil (about 985,000 barrels per day) from its Strategic Petroleum Reserve last week, meaning the current U.S. Strategic Petroleum Reserve fell below 500 million barrels for the first time since 1986. mark . The International Energy Agency earlier warned that “global oil supply may struggle to keep pace with demand next year.”
The SPR may be the last buffer to contain oil prices and global inflation later this year and into 2023, so the next question may be, what happens without the backing of strategic oil reserves?
As noted by Bloomberg Chief Energy Analyst Javier Blas, the U.S. government has released 13.7 million barrels from the SPR over the past two weeks, however, commercial oil inventories have still fallen by 3 million barrels over the period. In addition, an earlier article in Wall Street News also pointed out that since opec and its allies coordinated production cuts in May 2020, the cumulative output of OPEC+ is 562 million barrels less than the level stipulated in the agreement, while Saudi Arabia and the United Arab Emirates oil production capacity is close to the limit .
The cancellation of additional supply also means that commercial inventories are quickly depleted, which will put upward pressure on oil prices, which means that Biden’s efforts to stabilize oil prices will eventually turn into a “bamboo basket of water.”
Returning to the news that the White House is analyzing and studying the $200 oil price scenario seems to be “reasonable.”