Oil drops nearly $5 as Biden calls for lower fuel taxes

Oil drops nearly $5 as Biden calls for lower fuel taxes

Oil prices fell sharply on Wednesday, June 22, amid efforts by US President Joe Biden to cut fuel taxes in order to reduce the cost incurred by drivers in light of the tense relationship between the White House and the American oil sector.

By 9:18 GMT, Brent Crude futures fell $4.65, or 4.1 percent, to $110 a barrel, while US West Texas Intermediate crude futures fell $5.08, or 4.6 percent, to $104.44 a barrel.

Earlier in the session, the two stocks each lost more than $6, reaching their lowest levels since May 19 and May 12, respectively.
A senior administration official said Biden is expected to ask Congress on Wednesday to approve a three-month moratorium on a federal gasoline tax of 18.4 cents a gallon and call on his country’s states to suspend fuel taxes.

In the United States, lawmakers from both parties have expressed opposition to suspending the federal fuel tax.

Biden is expected to make the announcement at 18:00 GMT.

The White House has invited the CEOs of seven major oil companies to a meeting this week to discuss ways to increase production capacity while lowering fuel prices by about $5 per gallon while maintaining record profits for those companies.

And giants Vitol and ExxonMobil indicated this week that expectations are still that global supply is expected to lag behind demand growth.

The International Energy Agency also said Wednesday that the $2.4 trillion investment to be pumped into the energy sector this year includes record spending on renewable energy sources, but it will not be able to close the supply gap and address climate change.

On Tuesday, government data showed that US refining capacity fell in 2021 for the second year in a row.