President Biden announced that his administration would release 50 barrels of crude from the Strategic Petroleum Reserve in an effort to combat rising fuel prices.
The United States, India, China, Korea, and the United Kingdom have all coordinated to release crude supply to control surging global energy prices. As oil prices reach 7-year highs, the average for just 1 gallon of gas in the U.S. is $3.409 right now, +$2.11 YoY. Yikes.
After crude is released by policymakers, it takes about 13 days to reach the markets. Again Capital analyst John Kilduff commented “This is a well-timed move to try and lower oil prices. This added supply should help to bridge the production shortfall ahead of winter, especially if we get confirmation of meaningful supply, as well, from several of the major Asian consuming nations.”
Over the summer, Biden asked OPEC and its allies to raise oil output amidst soaring energy prices. As fuel demand rises post-pandemic, policymakers are supporting supply to keep prices low, especially amidst obvious inflationary pressures.