White House urges global oil producers to pump more to curb prices

The Biden administration Feb. 8 again urged US and global oil producers to increase supply but put a sharper point on it by suggesting they were intentionally restricting supply to hurt US consumers.

White House press secretary Jen Psaki said "all options remain on the table," when asked if the government would move to tap the Strategic Petroleum Reserve again.

"Supply is not keeping up with the demand," Psaki said during the White House press briefing. "We know that is the core issue. Nobody should hold back supply at the expense of the American consumer, particularly as the recovery from the pandemic continues.

"And oil producers around the world have the capacity to produce at levels that match demand and reduce the high prices."

Crude futures have raced past $90/b in recent weeks, leaving major oil forecasters to debate if they will cross $100/b for the first time since 2014.

The US Energy Information Administration Feb. 8 raised its WTI crude spot price estimate for 2022 by $8.03 to $79.35/b and increased its 2022 estimate for Brent crude prices by $7.92 to $82.87/b.

EIA pointed to consistent draws on global oil inventories coupled with heightened worries over possible oil supply disruptions because of political unrest in Ukraine and other areas.

The White House once again has few options to respond to high oil prices as they touch the mid-$90s/b a little over two months after the Biden administration tapped emergency crude stocks.

Analysts expect the administration to continue relying on the grab bag of policies and rhetoric that get brought out when domestic fuel prices rise. These include urging US and OPEC drillers to pump more, tapping the Strategic Petroleum Reserve again, promoting anti-OPEC legislation in Congress, pushing the Federal Trade Commission to keep probing price gouging, and potentially bringing back talk of US crude export restrictions.

Energy prices are the largest driver of inflation, which is testing President Joe Biden ahead of the tightly contested November mid-term elections that will determine control of Congress.