The White House said it would guarantee to buy some oil from drillers to fill emergency reserves.
The Strategic Petroleum Reserve is releasing oil at record levels to help lower gas prices.
Gas prices continue to fall, but this is largely due to reduced demand for the fuel.
More gas price relief could be in store for cash-strapped Americans as the government continues to use oil from its stockpiles.
On Tuesday, the Biden administration announced It will release even more crude oil from the Strategic Petroleum Reserve (SPR) – and work to replenish that SPR’s supply. The White House would do so by establishing a federal guarantee to buy oil from certain drillers at predetermined prices to help restore the SPR.
This appears to be an attempt to encourage more domestic drilling during high gas prices. The Energy Department will soon propose a rule to help them do that.
More than 125 million barrels of crude oil have already been sold since the government first began its “unprecedented” release in March, according to a statement from the White House, and about 180 million barrels by the time reserves fall. Ready to release.
An report The Treasury Department estimates that the release of crude oil from reserves has lowered gasoline prices by about 17 to 42 cents a gallon from where they would be without federal action.
In late February and early March, gas prices began to rise amid the Ukraine war. Indicated Biden will ban oil and gas imports from Russia. Rising gas prices are “Putin’s price hike,” he said. Without Russian imports, the U.S. was under greater pressure to produce more oil, and faster — but The end of the fracking boom That meant that wasn’t happening, causing prices to rise further. The plan to restore the strategic reserve at fixed prices is intended to entice producers to increase drilling.
For a country dependent on the car, the widespread adoption of non-oil-based energy means that rising gas prices are squeezing Americans’ wallets. Inflation reached one in June. 41 year senior; According to Bureau of Labor Statistics’ Consumer Price IndexGas prices are skyrocketing. Inflation increased by almost half.
Despite this, gas prices have been falling for a month, a result of reduced demand. According to US Energy Information AdministrationFor the week ending July 25, the price of a gallon reached $4.33. The current average price of gas is $4.327 per gallon, down from $4.90 a month ago, according to AAA.
“Gas prices have fallen an average of 69 cents per gallon over the past 42 days. That’s six consecutive weeks of declines – and the fastest decline in more than a decade!” White House press secretary Karen Jean-Pierre wrote Twitter.
wrote Patrick DeHaan, Head of Petroleum Analysis at GasBuddy Twitter that 11 states are seeing average prices below $4. However, he doubts that the release of crude oil from reserves is a “major catalyst” causing prices to fall.
“Most of the decline is due to the economic slowdown (rising interest rates) and limited improvement in the inventory of refined products,” as well as the destruction of demand, DeHaan tweeted..
“My view is that the SPR release is reducing the range of how oil prices can go, but not necessarily lower oil prices.”
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