Biden may get reprieve with gas prices projected to drop
The price of gasoline is expected to fall in the coming weeks, a shift that could give U.S. consumers shaken by inflation some relief — and that could also boost President Biden.
The White House has been hammered by Republicans over rising fuel prices, as the cost of gas has skyrocketed from its lows during the pandemic.
The price at the pump is widely seen as a factor in Biden’s falling approval ratings, which have also taken hits from pandemic fatigue, inflation, fallout from the withdrawal from Afghanistan and dissatisfaction over Democratic bickering over the Biden agenda in Congress.
Crude oil hit a peak of nearly $85 per barrel on Oct. 26 but dropped all the way to about $66 per barrel on Dec. 1 amid fears of the new omicron variant of the coronavirus. On Tuesday, prices were back to about $72 per barrel as fears in markets ease over the extent of the danger from omicron.
Prices at the pump didn’t drop immediately, but have come down in recent days, averaging $3.35 per gallon, according to the American Automobile Association (AAA). That’s down from $3.39 a week ago and $3.42 a month ago — which is likely not enough to provide much of a relief to U.S. drivers.
AAA spokesman Andrew Gross said crude prices remain between $60 and $70, and that will deliver cuts to consumers.
“They kind of met some resistance at $3.42 and now they seem to be retreating,” Gross said. “That’s really all due to the price of oil per barrel, as long as oil prices keep kind of bouncing around in the 60s, that takes a lot of pressure off of what people pay at the pump.”
Meanwhile, the federal government released a new projection on Tuesday showing that gas prices are expected to keep falling, averaging $3.13 per gallon this month, and falling to $3.01 per gallon in January.
It noted that its projection is facing “heightened levels of uncertainty” because of the coronavirus pandemic and specifically the omicron variant.
Patrick De Haan, head of petroleum analysis at price comparison website GasBuddy, predicted that prices in the coming weeks could fall by as much as 25 cents more per gallon.
“We probably still have another week or two [in] which we’ll see gas prices declining in most of the country,” De Haan said on Monday. “I would expect the decreases to continue, I think we probably have another 15 or 20 cents, maybe 25 cents a gallon for retail gas prices … before we’re kind of caught up.”
He said that this is because the drop in gasoline prices weren’t commensurate with the drop in crude prices yet.
“It’s lagged behind as it often does, but I would say the decline has been a little bit slower paced than what I would have expected.”
He said he wasn’t sure why the decline was slower, but that “a lot of stations are simply passing along the lower prices much slower.”
De Haan said that omicron is the main factor in the drop, and added that the lack of information about the new coronavirus variant is creating “anxiety” in the market.
Presidents, generally speaking, have little control over the price of gasoline, but that doesn’t stop them taking the blame when prices are high. Biden has seen his approval rating hover at around 43 percent in recent polling.
In recent weeks, the administration has made moves to try to bring the price down, including by calling on other countries to increase their oil production and tapping into its crude oil reserves.
And administration officials have indicated that they were looking at multiple “tools” to lower gasoline prices — while several Democrats have floated the idea of banning crude oil exports to increase domestic supply.
Tom Kloza, global head of energy analysis at the Oil Price Information Service, said that this messaging could be another reason for the price drop.
“There are some things that could be done that would be very, very onerous for the oil and gas business,” he said. “If people think that there’s a chance that … we’re not going to be able to export crude and all the sudden we’re going to have all of this additional crude stateside, they’re going to be less aggressive in speculating in crude and investing in crude.”
Kloza also noted that demand for gasoline is lower in the winter, so there’s also generally a drop expected around this time of year.
Republicans have seized on the high gasoline prices to attack Biden, and an analysis from left-wing think tank Data for Progress showed a strong correlation between Biden’s disapproval rating and gasoline prices.
GOP strategist Doug Heye told The Hill that if prices drop, it’s unlikely to change the GOP’s strategy.
“Gas prices are part of a larger conversation on inflation,” Heye said. “They’ll be able to transition…to talking about the price of beef to used cars, new cars, anything that we’ve seen a real spike in prices over the past year.”
“I don’t think this dramatically changes their calculus at all,” he added.
Democrats so far have struggled to message on gasoline price and inflation issues, including a much-ridiculed chart tweeted by the Democratic Congressional Campaign Committee.
That chart, posted by Democrats’ House race campaign arm, thanked the president for a two-cent drop in the price of gasoline.
The party faces something of a balancing act on the issue, needing to both satisfy constituents who are concerned about the price of gasoline and those concerned about climate change.
Meeting criticism from some environmentalists as they called for increased oil production to alleviate the crunch, the administration has stressed that this is only a short-term strategy as it wants to invest more in clean energy in the long run.
Ahead of last month’s global climate summit in Glasgow, Scotland, Biden himself acknowledged that pushing for countries to both increase production and cut their emissions can seem “like an irony.”
“But the truth of the matter is — you’ve all known; everyone knows — that the idea we’re going to be able to move to renewable energy overnight and not have — from this moment on, not use oil or not use gas or not use hydrogen is just not rational,” he said at the time.
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