Biden's oil blame game backfires
US crude settled at the $95 level on Wednesday
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President Biden blamed Russia for the big recent jump in gasoline prices, but it isn’t flying on Main Street, so now he’s placing blame with big U.S. energy companies.
"Oil prices are decreasing, gas prices should too," the president tweeted. "Last time oil was $96 a barrel, gas was $3.62 a gallon. Now it's $4.31. Oil and gas companies shouldn't pad their profits at the expense of hardworking Americans."
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A wonky red and blue trading chart using Bloomberg data was also included, but it may have backfired. Javier Blas, who works for the financial data and news company, tweeted a chart that actually seemed to dispute the president's contention that somehow oil companies are padding their profits at the expense of the American people.
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| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| UGA | UNITED STATES GASOLINE FUND LP PARTNERSHIP UNITS | 70.95 | -0.50 | -0.70% |
| USO | UNITED STATES OIL FUND L.P. | 78.79 | -0.12 | -0.15% |
"I see the White House chart is sourced to Bloomberg LP data. As a public service, I'm going to suggest a different chart. Mine has some of the same elements (WTI oil and retail US gasoline price), but instead, I normalized it, and use Dec 1, 2021, = 100," Blas tweeted.
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Mr. Blas's chart shows the opposite, that oil companies failed to pass on the cost of the crude price increase to customers at the gas pump.
According to most recent data from the Energy Information Administration (EIA), 56% of the cost of gasoline is the hard cost of crude oil that the refiners have to pay. The chart shows that the price increase at the pump failed to keep up with the incredible jump in crude oil prices. It also shows that oil companies were making less money, not more on the way up.
That is why it seems to some that prices go up much faster than they fall because, after a big price spike in crude, most oil companies get squeezed on the revenue side on the way up. In other words, based upon that chart, it's very clear that energy companies did not pass on the entire price increase in the cost of crude oil and may have to keep prices higher to make back revenue they lost on the way up.
They better make money because, under President's Biden new regulations and tax proposals on oil companies, it will make it much more expensive to replace spent supplies of both oil and gasoline.
President Biden and the White House COVID-19 Response Team participate in a virtual call with the National Governors Association from the South Court Auditorium of the Eisenhower Executive Office Building of the White House Complex Dec. 27, 2021. (Kent Nishimura/Los Angeles Times via Getty Images / Getty Images)
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Biden has to understand that U.S. oil companies and oil workers are not our enemies or the enemies of freedom. Iran is an enemy of freedom. Maduro in Venezuela is an enemy of freedom. Let's face it: When we think of freedom, we don't think of Saudi Arabia. So why is President Biden so quick to blame the oil companies with misleading facts instead of working with them to produce more oil to keep gasoline prices down?
The White House would not need any scapegoats if we began to value our domestic energy producers.