White House 'frustrated' by slow retail response to oil price drop: Psaki

The Biden administration expressed frustration Nov. 30 that US retail gasoline prices have not yet reflected the sharp drop in crude futures brought in recent days by the omicron variant's threat to the demand outlook.

White House Press Secretary Jen Psaki added that the administration remains in "regular touch" with OPEC and again urged the producer bloc to increase oil supply at its Dec. 1 meeting.

"We continue to convey that we are hopeful they will release supply to meet the demand out there in the market place," Psaki said during a press briefing.

Crude futures slid further Nov. 30 on concerns over the effectiveness of vaccines on the new omicron variant and a stronger US dollar.

NYMEX January WTI settled at $66.18/b, down $3.77/b day on day and down $12.21/b since Nov. 24, the last trading day before news of the virus strain slashed the oil demand outlook.

"We're frustrated because you've seen a decrease in oil prices, you've not seen a decrease in gas," Psaki said. "It doesn't take an economist, it doesn't take an oil market expert to recognize that that doesn't sound look or smell right."

Psaki pointed to President Joe Biden's Nov. 17 request to the Federal Trade Commission to investigate whether oil and gas companies had engaged in anti-competitive or "otherwise potentially illegal conduct" to keep prices high.

"This is a real impact on the American people. It is incredibly frustrating," Psaki said. "That's why the president is so focused on it."

Retail gasoline prices often follow what economists call a "rockets and feathers" trajectory, rising quickly when crude futures rise but falling slower when crude prices drop.

Patrick De Haan, an analyst for price-comparison website GasBuddy.com, said the retail price response was coming, but stations take three to five days to refuel.

"However with some uncertainty over omicron, they may pass it along more slowly," he said on Twitter.