Gas and diesel prices will remain elevated regardless of the results of the 2022 midterm elections, according to industry analysts.
“No matter the outcome of tonight’s election: #GasPrices will remain above average, because politicians are not the active reason they are above average,” Patrick De Haan, head of petroleum analysis at GasBuddy, tweeted Tuesday.
De Haan further noted that diesel prices will also “remain historically high, since politicians are not active because they are historically high,” Oil and refined product analysts cited various reasons why pump prices remain high, including. the coronavirus pandemic and geopolitical tensions.
AAA reported that the national average price of regular gasoline on Wednesday was $3.80 per gallon. It is four cents higher than a week ago and almost 40 cents more than a year ago. Still, that’s below the record $5 per gallon, which was reached in early June.
High gas prices have been a stumbling block for the Biden Administration before midterm electionsBut analysts have argued that there are many factors weighing on pump prices including Russia’s war on Ukraine and the decision by OPEC + to sharply cut production by 2 million barrels per day starting in November.
“The recent OPEC+ cuts in production quotas have contributed to tighter supplies,” Lipow Oil Association President Andy Lipow told FOX Business.
At the same time, the European Union plans to impose restrictions in buying Russian crude oil by early December, according to Reuters. This will add “to the difficulty of securing oil to meet consumer demand,” added Lipow.
Crude oil accounts for more than half of what consumers pay at the pump, according to the US Energy Information Administration (EIA). When oil supply is disrupted, it is likely that pump prices will increase.
The group’s latest weekly crude oil report showed gasoline production rose last week, averaging 9.8 million barrels per day. Distillate fuel production increased last week, averaging 5.2 million barrels per day.
Another factor keeping pump prices “stubbornly high” is refinery outages in the Midwest and West Coast. The breach “has affected supply at the same time that the national inventory has drawn and is now 4% lower than a year ago,” added Lipow.
Similarly, EIA told FOX Business last month that geopolitical risks associated with Russia’s full-scale invasion of Ukraine, OPEC + announced production cuts and global natural gas and coal supplies, some global factors affect the price of energy commodities.
The Biden administration said its actions to “strengthen energy security, address the supply crisis, and lower costs” in responsePutin’s Price Rise at the pump.”
This includes plans to release 15 million barrels from Strategic Petroleum Reserve (SPR) will be delivered in December, which will complete the 180-million-barrel drawdown that Biden announced last spring.
The administration said the move helped “stabilize the crude oil market and reduce pump prices.”
Meanwhile, Nick Loris, C3 Solutions vice president of Public Policy, told FOX Business, that an additional 15 million barrels will help, “but not much”.
Loris said that the barrels will be distributed for 30 days and in one day alone, America consumes about 20 million barrels.
“At the global level, 15 million barrels is equivalent to a few hours of consumption,” he said. “It’s not really going to move the needle on pump prices, especially since the market has been anticipating the release of reserves.”
Still, Loris noted that it is “challenging to accurately isolate the effect of the release on the market because of all the other variables that affect the global oil market.”
According to a Treasury Department learn in July, the SPR release and it was found that Biden’s total release lowered the price from 13 cents per gallon to 31 cents per gallon.