Title: Oil Down as Biden Aims to Bring Down U.S. Fuel Cost

Jun 22, 2022 12:45AM ET

By: AnalysisWatch

Oil prices fell Wednesday morning in Asia as U.S. President Joe Biden is set to push for a reduction in fuel costs in the United States.

At 12:40 p.m. ET, Brent oil futures were down 3.03% at $111.18 and WTI crude futures were down 3.37% at $105.83.

U.S. President Joe Biden is expected to ask Congress on Wednesday to temporarily suspend a federal tax on gasoline in an effort to lower rising fuel prices and ease pressure on consumers.

Even oil traders acknowledged that higher oil prices, and with them higher gasoline prices, would lead to a more aggressive "tag-team" attack by the Federal Reserve, which is raising interest rates, and the Biden administration, which is getting more creative on the policy and fiscal front to tame the beast of energy inflation, Stephen Innes, managing partner at SPI Asset Management, told Reuters.

Under pressure from the White House to lower fuel prices, seven oil companies will meet with Biden on Thursday.

However, the chief executive of energy company Chevron, Michael Wirth, said Tuesday that criticizing the oil industry is not the right way to lower fuel prices.

"These measures are not appropriate to address the challenges we face," Wirth said in a letter to Biden.

With European oil sanctions against Russia over its invasion of Ukraine not yet in place, supply will continue to tighten.

"The market is still coming to terms with increasing disruptions to Russian oil." European sanctions have not yet come into effect, "ANZ Research analysts said in a note.