(Bloomberg) — A U.S. energy envoy said he is confident Persian Gulf producers will increase oil output after President Joe Biden’s visit to Saudi Arabia, where he met with regional leaders.
Source: World Oil
“Based on what we heard on the trip, I’m pretty confident that we’ll see a few more steps in the coming weeks,” Amos Hochstein, the State Department’s senior adviser for energy security, said on CBS’s “Face the Nation” on Sunday.
Hochstein, who was part of Biden’s delegation on the visit, also cited Gulf oil producers Kuwait and the United Arab Emirates.
“It’s not just about Saudi,” he said. “There is additional spare capacity. There is room for increased production.”
Biden, weighed down by the hottest U.S. inflation in four decades including high gasoline prices, said during his Saudi visit that he expects further oil supply increases. Saudi officials stressed any decision to pump more would be made within OPEC+, which holds its next decision-making meeting on Aug. 3.
The US average national retail price of gasoline soared to a record $5 per gallon for the first time in June before retreating over concern that the US economy is slowing. It was $4.53 per gallon on Sunday, according to the AAA auto club.
Prices at the pump should decline further, White House economic adviser Jared Bernstein said Sunday on CNN’s “State of the Union.”
“I think it’s very likely that gas prices continue to track down, say, for the rest of the month,” Bernstein said. “I say that because not just the oil price is down 20%, but wholesale prices are down as well.”
Oil closed Friday below $100 a barrel for the first time since early April amid escalating recession concerns.
“We saw Saudi Arabia say that it would increase its capacity for all production, and I’d refer you to them for more information there,” he said.
Big Oil Swipe
For Americans dealing with rising prices that have been especially acute in both food and energy, the cost of gas has come down but remains too high, Bernstein said.
“We are talking about a decline that is completely insufficient when it comes to really delivering the relief to family budgets that they need,” he said.
Inflation has become a political problem for Democrats and the Biden administration with midterm elections in November. While Russia’s war on Ukraine has roiled energy markets, Biden has also been vocal in his criticism of oil and gas companies’ soaring profits, accusing them of price gouging and profiteering.
“These are companies, that we helped them, to the tune of billions of dollars, during the pandemic downturn,” Bernstein said. “They ought to share some of the profitability with the American people right now.”
