The Biden administration is getting what it wants—higher oil prices and higher gasoline prices that will result in Americans being forced to transition to electric vehicles and get to a net zero economy by 2050
Supply and demand have been mostly responsible for the increases in oil and gas prices since the heart of the pandemic. Global demand exceeds production by 2.8 million barrels a day. Demand has recovered in China and India and is on the upward spiral in the United States and Europe. Oil stockpiles that rose during the pandemic have decreased due to output cuts by OPEC+ (OPEC and its partners) and lower production in the United States during the pandemic. U.S. oil production was further curtailed by more than 10 percent, 1 million barrels per day, due to the freezing weather hitting oil producing states, particularly Texas. Adding to that, OPEC+ recently agreed to continue its production cuts through the end of April with minor exceptions. A March 7 attack on a Saudi oil port further increased Brent oil prices to over $70 a barrel. West Texas Intermediate oil prices had hit a low of minus $37.63 a barrel shortly last April before settling around $40 a barrel, but are now in the mid-$60 a barrel range.
