By Victor Reklaitis
President Joe Biden on Wednesday afternoon added to the pressure on the Organization of the Petroleum Exporting Countries, after one of his top advisers said earlier in the day that OPEC and its allies “must do more” to support the economic recovery.
“Recently we’ve seen the price that oil companies pay for a barrel of oil begin to fall, but the cost of gasoline at the pump for more American people hasn’t fallen,” Biden said in a speech at the White House. “That’s not what you’d expect in a competitive market. I want to make sure that nothing stands in the way of oil-price declines leading to lower prices for consumers.”
“So today, my director of the National Economic Council has asked the chair of the Federal Trade Commission to use every available tool to monitor the U.S. gasoline market and address any illegal conduct that might be contributing to price increases at the pump while the cost of barrel oil is going down,” the president added. “We also made clear to OPEC —- the major oil exporting nations of the world — that the production cuts made during the pandemic should be reversed as the global economy recovers, in order to lower prices for consumers.”
Oil futures recently traded higher, but they had retreated earlier Wednesday after U.S. National Security Advisor Jake Sullivan pressed OPEC and its allies to further boost output and described a recent agreement to increase production as “simply not enough.”
“The oil group is no stranger to the White House trying to interfere in its decision making process, with President Trump a constant critic of them during his term,” said Craig Erlam, a senior market analyst at Oanda, in a note. “How that will go down in the group is another thing. Some will be more than happy to increase production faster while others may be more reluctant after a prolonged period of very low prices.”
As the Biden administration draws flak for rising inflation, the president in his speech on Wednesday stressed that a new reading for the consumer price index showed “monthly price increases have come down.”
“Right now, our experts believe — the major independent forecasters agree as well — that these bottlenecks and price spikes will reduce as our economy continues to heal. While today’s consumer price report points in that direction, we will keep a careful eye on inflation each month, and trust the Fed to take appropriate action, if and when it’s needed,” the president said.
During a briefing on Wednesday ahead of Biden’s speech, White House press secretary Jen Psaki was asked by a reporter how the administration squares its push for OPEC to increase its production of a fossil fuel with its climate-change agenda, which has to do with getting away from fossil fuels.
“We know that they have supply that’s available that can be accessed, and that’s what we’re really referring to here,” she said in response.