President Biden switched gears on Wednesday, blaming “greedy” oil and gas companies for the high cost of gas.
The West Texas Intermediate oil benchmark had spiked to $124.90 per barrel last week, and there were fears it could go even higher as Biden announced a ban on Russian energy.
The White House at the time set about blaming oil prices on Russia, even branding it “Putin’s price hike.”
“Americans’ budgets are being stretched by price increases and families are starting to feel the impacts of Putin’s price hike,” Biden said in a statement.
“A large contributor to inflation this month was an increase in gas and energy prices as markets reacted to Putin’s aggressive actions.”
Prior to that, the administration blamed rising gas prices on the pandemic.
Rather than continue to rise from last week’s spike, the cost of oil dropped to under $100 per barrel. Oddly enough, it did so even as the war effort is still ongoing in Ukraine. It did so even as ‘Putin’s aggressive actions’ remain aggressive.
President Biden’s Twitter account posted a chart showing the cost of a barrel of oil going down but the gas prices staying relatively stable and, rather than blaming Putin, blamed greedy oil companies.
“Oil prices are decreasing, gas prices should too,” Biden said.
“Last time oil was $96 a barrel, gas was $3.62 a gallon. Now it’s $4.31. Oil and gas companies shouldn’t pad their profits at the expense of hardworking Americans.”
President Biden pivoted from blaming Putin for soaring gas prices to blaming the oil companies and their incessant greed in the span of one week.
If one is to assume the price of oil was due to Putin, then there would be no reason for it to drop this week as it has.
Experts do suggest the drop in oil prices could be due to expectations of potential peace talks between Ukraine and Russia, but they also note demand in China has dropped due to new coronavirus lockdowns in that country.
That seems to be a bigger factor.
“Crude oil prices are determined by global supply and demand,” the U.S. Energy Information Administration states on their site. “Economic growth is one of the biggest factors affecting petroleum product—and therefore crude oil—demand.”
Biden blaming oil companies indicates panic within the administration and an understanding that they need to get those costs down for the average American and are begging for any reason that should happen.
Historically, the cost of gas goes up almost immediately upon a rise in oil prices, but takes longer to go down when the opposite occurs. It’s not a unique concept to the Biden era.
CNN Business points out that there is a term for that phenomenon known as “rockets and feathers.”
“This has been going on for 40 years,” Andy Lipow, president of Lipow Oil Associates, told CNN. “Prices do dip, it just seems to take a long time. You can’t deny the data that is out there.”
Nicole Petersen, a spokesperson for GasBuddy, suggests the costs drop more slowly due to the individual stations themselves.
“Essentially, gas stations often take losses when oil prices rise so quickly because they cannot dramatically increase pump prices due to local competition,” said Petersen.
“When oil prices drop, stations take a little bit more time to lower prices as to recoup any losses taken when oil prices rose quickly.”
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