Canada Gas Prices May Be Affected By Biden’s Oil Release

An expert in Canada says that despite President Joe Biden’s announcement on Tuesday that he had authorized the release of oil reserves, rising gas prices will not be slowed down by the move and may even be pushed higher.

Approximately 50 million barrels of oil will be released from the Strategic Petroleum Reserve (SPR) by the U.S. Department of Energy, according to the White House. But the price of oil rose by $1.75 to US$78.50 per barrel on the day following the announcement. 

Dan McTeague, president of Canadians for Affordable Energy said “Biden’s gambit did not pay off,” and “It’s fair to say his strategy blew up in his face.”

In light of the market’s reaction and current trends, he predicted that Canadians could see a few cents more at the pump. He also said that the amount of US oil released isn’t sufficient to have a noticeable impact on consumer prices.

“When we think 50 million barrels, you know, the world consumes almost double that in a given day,” he said. “So it’s really a drop in the bucket.”

On one hand, 32 million barrels of oil will be released for future return, effectively making it available for loan, while the remaining 18 million barrels will be sold as part of a sale previously approved by the United States Congress.

As McTeague pointed out, there had been recent rumours circulating that the United States was planning to dip into the Strategic Petroleum Reserve, so such considerations may have already been baked into the price of oil prior to Tuesday’s news.

“Reserves are meant for extraordinary times, and these are not extraordinary times,” he said. “We didn’t have a hurricane. There’s not a war that’s inhibiting supply.”

“If you want to cure high prices, you’ve got to allow high prices to curb demand,” he said. “You can’t turn around and suddenly decide, ‘Hey, I found a way to get a short fix here to drop energy prices by flooding the market with a simple reserve of product,’ which, you know, if nothing else dropped prices increase demand. It’s very counterintuitive. This is a supply problem, not a demand problem.”

Original source material for this article taken from here