Image: Reuters Berita 24 English - On Wednesday, oil prices plunged more than $6 a barrel in response to U.S. President Joe Biden 's ef...
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| Image: Reuters |
U.S. West Texas Intermediate (WTI) oil futures were at $103.54 per barrel at 0718 GMT, off lows but still down $5.98, or 5.46 percent. Similar to this, the price of Brent crude futures fell by $5.67, or 4.95 percent, to $108.98 a barrel.
President Joe Biden is anticipated to advocate on Wednesday for temporarily suspending the 18.4-cents per gallon federal tax on gasoline, a source familiar with the proposal told Reuters, as the United States, the world's largest oil consumer, tries to combat rising gasoline costs and inflation.
According to Stephen Innes, managing partner at SPI Asset Management, "I think the non-stop Biden headlines, with the administration seemingly in inflation panic mode, have played a part in the latest sell-off as investors hate any uncertainty, even if irrational in the context of the known supply concerns."
On Thursday, Biden will meet with seven oil corporations under pressure from the White House to lower fuel costs as they post record profits.
However, Chevron CEO Michael Wirth stated on Tuesday that criticising the oil business was not the best method to lower gasoline costs.
In a letter to Biden, Wirth stated, "These measures are not conducive to tackling the difficulties we face," prompting Biden to respond that the sector was being overly sensitive.
Despite concerns about inflation, the market is projected to remain tight because supply is predicted to expand more slowly than demand, as noted this week by trading giants Vitol and Exxon Mobil Corp.
Brent is the internationally traded benchmark, and in the real world, supplies are still tight, according to Jeffrey Halley, analyst at oil consultancy OANDA. "From here, a more plausible conclusion is a widening of the Brent premium over WTI," he added.
According to the most recent official data released on Tuesday, the capacity of American oil refineries to generate gasoline and diesel decreased in 2021 for the second consecutive year as a result of plant closures.
According to the official figures, capacity decreased by 125,790 barrels per day (bpd) in 2017 in addition to an 800,000 bpd decrease in 2020.
