$100 oil prices impacts consumers less than it used to, portfolio manager says
Biden administration curtailing drilling on federal land heavily impacted supply, says portfolio manager Adam Johnson
$100 oil prices 'bites' consumer less than it used to: Portfolio manager
Adviser Investments portfolio manager Adam Johnson weighs in on sky-high oil prices.
During an interview on "Mornings with Maria" Adam Johnson of Adviser Investments said that $100 oil impacts consumers less than it used to due to increased fuel efficiency in cars, however, oil supply still remains a major concern.
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ADAM JOHNSON: Yeah, I mean, it does, but remember, you know, cars have gotten, not to simplify, but cars have gotten so much more fuel-efficient. So when you think about it, you know if you can get 40 miles a gallon, that's very different from the 20 miles a gallon that you got, you know, 15 years ago. So $100 oil actually bites the consumer less than it used to. And again, I don't mean to oversimplify, because oil is an input for so many different aspects of the economy. But we are working through that, Maria. The one issue that we have to wrestle with is the fact that at the moment, even though we have all this oil in the ground, we're undersupplied. You know, producers shut off the spigot a year and a half ago when oil went down to 15 or 20 bucks. It didn't obviously pay to bring it out of the ground. You can't just turn the spigot back on. You couple that with the fact that the Biden administration curtailed drilling on federal land, and it was a serious impact on supply. So that's in part why oil is up where it is. There's also the risk premium. Again, fuel efficiency has improved, so it doesn't bite as much as it used to. But you know, oil at these levels, it's an impact. There's no question.
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