Title: Rising Fuel Prices in the US Ring Alarm Bells in Washington as President Biden Seeks Reelection
Introduction:
As fuel prices continue to rise in the United States, concerns are growing in Washington, particularly as President Joe Biden positions himself for reelection, emphasizing lower inflation and the strength of the US economy. The surge in gasoline costs, driven by a 20% increase in global raw oil prices and supply cuts by Saudi Arabia and Russia, has reignited fears of $100 per barrel oil and raised concerns about the political consequences. In this article, we will explore the impact of rising fuel prices on the American economy, the response from the White House, and the potential implications for President Biden.
Section 1: The White House and Fuel Price Panic
1.1 The Influence of Fuel Prices on Consumer Confidence
1.2 The White House’s Monitoring of Gasoline Prices
1.3 Saudi Arabia’s Decision to Extend and Increase Production Cuts
1.4 Biden Administration’s Previous Calls for Increased Production
Section 2: The Political Fallout and Biden’s Bid for Reelection
2.1 Republican Opposition and Criticism of Biden’s Energy Policies
2.2 Recent Fuel Price Hikes and Their Impact on Biden’s Approval Rating
2.3 Brent Crude Reaching Four-Month Highs and Geopolitical Tensions
Section 3: The Global Oil Market and Fuel Demand
3.1 Goldman Sachs Analysts’ Perspective on Global Oil Demand
3.2 Consulting Firm Enverus’ Forecast of Brent Crude Reaching $100 a Barrel
3.3 Historical Trend of Fuel Prices in the US
Section 4: Consequences and Future Scenarios
4.1 Politicians Bracing for Fuel Price Hikes
4.2 Potential Weaponization of Oil Exports by Russia
4.3 Biden’s Limited Options to Control Prices
4.4 Potential Assistance from Saudi Arabia
Section 5: The Way Forward and Conclusion
5.1 Exploring Better Relations with Saudi Arabia
5.2 Potential Implications for President Biden’s Reelection
5.3 Summary of Key Points
Section Break: Additional Insights and Perspectives
Conclusion:
Rising fuel prices in the US are sending alarm signals in Washington as President Biden prepares for reelection. The surge in gasoline costs, driven by global price increases and supply cuts, poses a significant challenge for the administration. While the White House continues to monitor the situation, concerns over consumer confidence and approval ratings loom. The impact of rising fuel prices on the US economy and the potential geopolitical tensions add further complexity. As the situation unfolds, it remains to be seen how President Biden will navigate this challenge and whether it will affect his bid for a second term in office.
Additional insights:
– The role of fuel prices in shaping public opinion and electoral outcomes
– Strategies for managing and stabilizing fuel prices in the global oil market
– The implications of rising fuel prices on various sectors of the US economy
– How geopolitical tensions and conflicts impact oil prices and energy security
Summary:
Rising fuel prices in the US are becoming a cause for concern in Washington, impacting President Biden’s bid for reelection. The surge in gasoline costs, driven by global price increases and supply cuts, has raised fears of $100 per barrel oil and political consequences. The White House is closely monitoring the situation, but the impact on consumer confidence and approval ratings is a cause for worry. With geopolitical tensions and the potential weaponization of oil exports, the future remains uncertain. The administration may need to strengthen relations with Saudi Arabia and explore alternative strategies to stabilize fuel prices. As President Biden navigates this challenge, it remains to be seen how it will shape his reelection campaign and the broader US economy.
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Rising fuel prices in the US are ringing alarm bells in Washington just as President Joe Biden steps up his bid for re-election by touting lower inflation and the strength of the US economy.
The surge in gasoline costs to a nine-month high follows a 20% jump globally raw prices this summer after Saudi Arabia and Russia cut supplies. The move has revived forecasts of $100 a barrel of oil this year and fresh worries about the political fallout.
“The White House is in full panic mode,” said Bob McNally, head of the Washington-based consultancy Rapidan Energy Group and a former adviser to President George W. Bush. “Any incumbent president is under threat as prices at the pump rise due to the impact on consumer confidence and the president’s approval rating.”
A White House official said the administration continues to monitor gasoline prices closely, but added it was “important to remember that prices are still down more than $1 from last summer’s peak.”
Saudi Arabia risked angering the White House last week announcing that would extend and potentially increase existing oil production cuts, despite the International Energy Agency’s warning that crude markets are set to contract significantly in the coming months. The kingdom followed up on Saturday by raising the price of its oil in Asia.
The Biden administration has repeatedly called on Riyadh to pump more oil over the past two years and last year accused the OPEC+ cartel to “align itself with Russia” as it launched its current round of supply cuts.
The latest US pump price hikes include diesel, a crucial input cost for the industrial and agricultural sectors, and come as hopes mount that the Federal Reserve could engineer a soft landing for the economy after months of price hikes. interest rates to suppress inflation.
The president has spent the past few weeks hyping his “Bidenomics,” citing cooling inflation and record job creation.
But Republican opponents have latched on to recent fuel price hikes, blaming them on what Florida Gov. Ron DeSantis calls Biden’s “war on American energy” — a signal of the GOP’s future lines of attack if fuel costs gasoline continue to rise.
International benchmark Brent crude oil hit a four-month high of $86.65 a barrel on Friday after Ukrainian drone strikes on naval vessels in the Russian Black Sea oil port of Novorossiysk. A Russian tanker was later hit near Crimea, heightening fears that Ukraine’s counteroffensive could cut off energy supplies. US and international oil prices are near year highs.
Goldman Sachs analysts said last week that global oil demand hit a new record of 102.8 million barrels a day in July, amid a surge in summer air and road travel, economic resilience in the U.S. and India and stronger-than-expected oil demand from China.
“Fears about a recession and China’s implosion have eased massively in the past three to four weeks — and that has brought investor interest back into oil,” said Jeff Currie, global head of commodity research at Goldman.
Consulting firm Enverus believes surging global demand and weak supply growth will push Brent to $100 a barrel before the end of the year.
Average gasoline prices in the United States fell last year after jumping to a record high following Russia’s full-scale invasion of Ukraine. But they’ve risen nearly 10% in the past month, to $3.83 a gallon, and remain about 60% higher than when Biden took office.
Politicians from Washington to Europe are bracing for the consequences of new fuel price hikes. Rishi Sunak’s government in the UK this week expressed hope that North Sea oil and gas fields could boost energy security, despite pledges on climate change.
“If we go into the fall with increasing demand and reduced supply, we will continue to have upward pressure,” said Dan Yergin, vice president of S&P Global. “And you can already see the feathers going up the back of people’s necks in Washington.”
Market watchers also fear that Russia may choose to weaponize its oil exports next year to try to influence US elections, similar to its decision to cut gas supplies to Europe last year.
Republican presidential frontrunner Donald Trump has indicated he would try to force Ukraine to negotiate with Russia if elected, and rising prices at the pump has the ability to sway the election in close quarters.
“Vladimir Putin is also the CEO of Russia Oil Inc and he understands the dynamics of the market very well,” Yergin said.
Analysts say the White House would have less firepower to contain new price jumps after reducing emergency supplies last year to cool the oil market, leaving the Strategic Petroleum Reserve at its lowest level since 1984.
The US may need to turn to OPEC leader Saudi Arabia for help again, analysts said, though Biden has been less able to influence Riyadh’s oil procurement policy than Trump.
“As SPR releases are no longer an easy option to dampen prices, the fallback option is to ensure there is better relations with Saudi Arabia to ensure Riyadh steps in if oil prices get out of hand,” said Helima Croft of RBC Capital Markets.
Additional reporting by Felicia Schwartz
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