Gas prices are returning to the spotlight just weeks ahead of the midterms, turning up the heat on President Biden and the Democrats.
Despite a drop in the past few days, gasoline prices are still up nearly 20 cents from where they were a month ago, though still well below the summer peak.
In an apparent effort to blunt criticism over rising prices at the pump, the White House is signaling action on the issue, with Biden on Wednesday touting the release of 15 million barrels from the country’s strategic reserve.
However, experts say the move is unlikely to have major implications at the pump.
Just last month, gas prices were falling, adding to a checklist of Democratic wins over the summer that had the party feeling optimistic about November’s elections.
But changes in gas prices have helped slow that momentum.
Prices on Wednesday averaged $3.85, about 17 cents higher than they were a month before.
Factors that were expected to contribute to a rise over the past month or so include production cuts from a group of oil exporting nations known as OPEC+ and refinery outages in the West and Midwest.
Both gasoline prices and inflation more broadly are seen as a top concern for voters, and Republicans have sought to hammer Democrats on the issue during the midterm homestretch.
Some analyses have found that Biden’s favorability has correlated with gasoline prices, even though there is little he can do to counter global market forces.
The latest release from the strategic reserve was not a new move, but rather part of the 180 million barrel release that he previously announced in March.
Robert Weiner, a professor at George Washington University’s business school, said it was unlikely to deliver savings at the pump.
“I don’t see how this would have any effect because it doesn’t change expectations. All it is is repeating something that has already been announced,” he said.
However, in a speech Wednesday, Biden also said he told his team to “be prepared to look for further releases in the months ahead if needed,” though he did not explicitly commit to future actions.
Weiner said new releases at a large scale could actually draw prices down, but added the suggestion alone from Biden’s Wednesday speech is not enough.
Still, the average price of gas is about 7 cents lower than where it was a week ago, a fact that the White House has been eager to point out.
“Gas prices have fallen every day in the last week,” Biden said in his speech on Wednesday.
Biden’s chief of staff, Ron Klain, touted the most recent drop on Twitter.
“After four week rise, now in a second week in a row of decline,” Klain wrote of the prices. “Now 16 states where gas is at $3.49 or lower…Moving in the right direction as @POTUS announces more actions today.”
Analysts have pointed to a number of reasons for the recent decline, including the reopening of some refineries whose closures drove up prices and recession fears.
Tom Kloza, global head of energy analysis at the Oil Price Information Service, predicted that gasoline prices will drop in the next few weeks, particularly on the West Coast. But, he said, that may not be true of the Midwest, where some refining outages may persist.
“If you’re in California, you might see the average price drop nearly a dollar a gallon in the next 30 days,” Kloza said.
“They saw prices skyrocket when they were performing their maintenance,” on refineries, he said. “They’re now coming back from maintenance. That is going to happen on the East Coast and at the Gulf Coast as well.”
In the grand scheme of things, prices are still much higher than they were last year, but considerably lower than $5 highs in June. Overall, Weiner said, Russia’s invasion of Ukraine is still a major driving force keeping prices relatively high.
“The fact that oil prices are so high is the result of a combination of the war in Ukraine and the actions taken by the U.S. and EU against Russia in punishment for its invasion of Ukraine,” he said.
Source: The Hill
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