Fuel prices eased in parts of the country over the busy holiday weekend, with the AAA reporting gas price averages at $4.77, down from $4.88 last week.
Still, President Biden seeks a larger decrease in fuel costs. He made his sentiments known on Twitter over the weekend.
My message to the companies running gas stations and setting prices at the pump is simple: this is a time of war and global peril.
— President Biden (@POTUS) July 2, 2022
Bring down the price you are charging at the pump to reflect the cost you’re paying for the product. And do it now.
Jim Wiesemeyer, ProFarmer policy analyst, says Biden’s comments show he “doesn’t understand” risk in the markets.
“The Wall Street Journal, Jeff Bezos and the leaders of our country are consistently showing us President Biden doesn’t understand how markets work,” says Wiesemeyer.
Market Moves this Week
Days after Biden’s comments, fuel markets shifted down.
On Tuesday, crude oil prices fell below $100 a barrel for the first time in nearly two months. Wholesale gas futures also fell almost 10% at market close, dropping 36 cents a gallon.
Wednesday’s market trends followed suit, with crude oil down $3.19, or 3.2% to $96.31.
ProFarmer’s Brian Grete says these dips coming out of Independence Day weekend generally set the tone for the weeks to come.
“The growing recession and weather changes created a perfect storm, while the U.S. dollar went up sharply. With technical selling and fund liquidation on top of it all, you get a massive down day that points to more near-term price pressure,” Grete explained.
The Government’s Hand at the Pump
While high fuel prices aren’t approved by Americans, nor the President, the odds of governmental fuel price controls are slim, according to Wiesemeyer.
“I do think that we’re going to see we have reached peak inflation once it shows up in the data in coming months, which will stop any dramatic push on price controls,” he says.
However, Wiesemeyer feels all price control bets are off if U.S. tides shift with Russia. He says any maneuvering in price capping with Russia would give Putin the green light to “take action.”
More on fuel:
EPA Proposes New Rules on RFS, Finalizes Biofuel Blending Requirements
Will a Fuel Boycott Lead to Decreased Prices at the Pump?
Farmers Are Now Paying Above $5 For Off-Road Diesel, And It’s More Than Just Russia to Blame
