Oil sluggish as President Biden calls for a gas tax holiday to lower pump prices

Oil sluggish as President Biden calls for a gas tax holiday to lower pump prices ...

President Joe Biden will demand that the country suspend the federal gas tax for at least three months Wednesday, while other states may grant similar relief, as his administration seems to ease a key component of domestic inflation in the world''s largest economy.

Federal gas taxes rise to 18.4 cents per gallon, with 24.4 cents to diesel, which is used in part to fund highway and infrastructure projects. The president''s proposal expects those taxes to be suspended until September, with the $10 billion in lostHighway Trust Fund funds removed from other portions of the Federal budget.

The President is also expected to renew his criticism of oil companies, which he accused of profiting from the current energy crisis, after receiving a unanimous decision from Chevron (CVX) - Get Chevron Corporation ReportCEO Mike Wirth in an open letter to the White House last night.

"Your administration has long sought to criticize, and sometimes vilify, our industry," Wirth said. "These actions are not beneficial to the treatment of our challenges."

"We need an honest conversation," said the narrator. "One that recognizes our industry is a vital component of the United States'' economy and vital to our national security."

The widely anticipated rise slowed worldwide oil prices in overnight trading as well as the implications of recent Covid infections in China and the prospect of further business and factory restrictions with WTI crude futures for August delivery falling $4.90 in overnight trading to $104.62 per barrel.

TheStreet Recommends

Stocks Slump, Biden Gas Tax Plea, Powell Testimony, Boeing, and Roxe - Five Things You Should Know

On Musk''s election for president, Musk teases Republicans.

A Cheesy Take on an American Classic is offered at the Taco Bell Menu.

Brent crude contracts for August, the global pricing benchmark, were last seen $4.57 down at $110.08 per barrel as new supply from Libya added to bettings of a near-term market glut.

According to research from the AAA motor club, gas prices in the United States decreased from this week''s all-time high to a national average of $4.955 per gallon last night, a move that still leaves pump prices 61.8% higher than this time last year.

President Biden has doubled its investment in the country''s Strategic Petroleum Reserve in order to boost domestic supply and help alleviate politically-charged consumer gas prices, but has yet to had little impact beyond reducing already-depleted stockpiles.

Last week, the SPR is at its lowest levels since January of 1987, while overall domestic stocks were reduced by a weekly record of 7.7 million barrels to just over 511 million barrels.

Due to western sanctions on the sale of Russian oil and the OPEC''s reticence to boost production, crude prices in the United States have increased by more than 35 percent since Biden first applied the Securities and Exchange Commission in late November.

Oil prices have risen 12% in the two weeks since President Barack Obama''s decision to release 30 million barrels from the Securities and Exchange Commission in June of 2011 to compensate supply constraints related to Libya''s civil war.

Biden''s most disastrous move on gas taxes might also result in the opposite effect.

"President Bidens'' preparation for the midterm election has received some attention, although a potential gasoline tax holiday, while supporting consumers, would enhance demand, thereby prolonging the period of tightness," said Saxo Bank''s chief commodity strategist.

You may also like: