As Americans begin the busy summer driving season, oil prices are moving even higher due to tight gasoline supplies.
Gasoline supplies dropped more than 4.2 million barrels and other petroleum distillates (diesel, Jet A, etc) were down 949,000 barrels, according to the American Petroleum Institute.
“The tightening in the U.S. gasoline market will raise concerns over supply as we move into driving season. Tightness in the U.S. is pulling in gasoline from elsewhere, including Europe, which is also looking increasingly tight,” said Warren Patterson, head of commodities strategy at ING, in a note.
The strain on gasoline supplies comes as the Biden administration’s failure to sell a single oil or gas lease heads into its second year. In fact, experts believe that Biden won’t make a single energy lease sale before the end of his first term.
“The practical effect of this is that it is unlikely there will be offshore lease sales before the end of 2023,” said Frank Macchiarola, API’s senior vice president of policy, economics and regulatory affairs. “This is one more example of the disconnect between the administration’s political rhetoric and policy reality.”
West Texas Intermediate (WTI) jumped $1.43 to $111.20 per barrel and July Brent crude (BRNN22) jumped $1.21 to $114.77 a barrel.
As of May 24, 2022, the U.S. average per gallon cost for regular unleaded was $4.60 while diesel rang in at an average of $5.55.
Just last week, analysts had predicted that gasoline would reach an average of $6.00 per gallon across the United States and if this is how the busy travel season is going to kick-off, they may have underestimated the Biden Effect.
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