Former Shell Oil President John Hofmeister warns that President Biden’s ‘hostile administration’ will cause problems at the pump.
President Biden’s “hostile administration” will cause problems with respect to gas prices, warned former Shell Oil president John Hofmeister in “Mornings with Maria” on Thursday.
West Texas Intermediate crude rose $ 1.06 to $ 62.34 a barrel on Thursday, with OPEC leaders and their allies reviewing supply cuts.
The recent rise in the oil markets has pushed oil prices to their highest levels since near the start of the coronavirus pandemic, fueled by a recovery in demand and cuts in production.
“The reason gasoline is coming back is that we are at a standstill in many of the refineries and this restricts what is available in terms of the final product,” said Hofmeister to presenter Maria Bartiromo.
Gas prices have risen at the pump in recent weeks, reaching a national average of $ 2.75 a gallon on Thursday, which is 33 cents more than in the same period in 2020, according to the AAA.
AAA predicts that the average national gas price will reach at least $ 2.80 this month, according to a press release, which explained that this means that drivers can expect continuous increases of at least 5 to 10 cents in local markets until the refinery’s operations are stable.
The latest price increases are “a direct result of the February winter storm that took 26 U.S. refineries offline and pushed refinery use from an average of about 83% to an atypical 68% low,” noted the AAA, citing the Energy Information Administration (EIA)
Freezing temperatures brought electricity down across Texas last month and resulted in one of the biggest disruptions in the United States’ oil production.
Winter storm closures have removed about 3 million barrels of daily oil production, or 27% of US production, much of which comes from the rich Permian basin located in western Texas and eastern New Mexico. Refining capabilities in Houston have also been taken down.
“Except for the hurricane season, March may bring the most expensive pump prices of 2021,” said Jeanette Casselano McGee, an AAA spokesman. “While the month is roaring like a lion, at the end of it we can see some relief at the pump, as refineries are resuming normal operations, especially if crude oil prices show signs of stability.”
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On Thursday, Hofmeister also pointed out something “more subtle” that is affecting gas prices.
“Producers are practicing serious capital discipline and are not coming back to produce more oil,” he said.
He added that producers are also “being pressured by the administration”.
He warned that “the Biden administration’s new lease ban” “will create a psychology in the industry that there will be less availability and psychology will also drive prices.”
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“As long as we see this hostile government, we will have problems with prices,” continued Hofmeister.
In January, President Biden signed an executive order that suspended drilling and fracturing on federal land and waters for 60 days in an attempt to combat climate change. Biden in the election campaign called on the United States to eliminate its dependence on fossil fuels.
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Jonathan Garber of FOX Business contributed to this report.