- The small dip in gas prices isn’t enough for consumers, Biden energy advisor Amos Hochstein said.
- He blames persistent demand and resistance from oil companies to expand, despite having the permits to do so.
- “They should be investing those dollars right back into production increases,” Hochstein said.
Gas prices have dipped since reaching record-highs earlier this year, but the recent small relief in prices is “not enough,” Biden Administration energy advisor Amos Hochstein said, who said stubborn consumer demand and reluctance by oil companies to expand operations is still contributing to tight conditions in the energy market.
“We’re pretty pleased with what we’re seeing, but we know that this is not enough,” Hochstein said in an interview with CNBC. WTI Crude fell to $92.83 as of 10:50 a.m. ET, down $1.59 from the market open. Brent crude was down $1.49 to $99.05, and average national gas prices according to the AAA were at $4.163 after spiking above $5 earlier this summer.
That’s moderate compared to estimates from banks like JPMorgan, which sid oil could skyrocket as high as $380 a barrel and gas could spike as high as $8-$9 a gallon.
“Doing this, at a time when the third largest oil producer is at war, that’s quite remarkable,” Hochstein said.
He noted that consumers have still been feeling the pain of high prices though, as Russia continues to slash energy supplies off the market and OPEC+ struggles to fill the gaping supply hole. The cartel only met about 60% of the production hike it promised last month, Reuters reported, part of the reason why prices have been driven up and Europe is now taking measures to prepare for a possible energy crisis this winter.
Hochstein blames the shortage on two factors: for one, energy demand hasn’t slowed despite rising prices, likely due to summer being a peak demand season for gas.
Second, Hochstein criticized domestic energy companies for not stepping up production, despite profiting massively from rising oil prices. Oil and gas companies across the board have smashed their profit records the past two quarters, with Shell raking in $11.5 billion and Exxon earning $17.8 billion in the last three month period.
“We’ve been very clear. And the president has been clear for the past several months. We want the oil and gas industry to increase production,” he said, “They should be investing those dollars right back into production increases. They have the permits they need.”
Hochstein added that without supply increases, much of the additional profit being raked in was at the expense of the consumer. He said the administration was working with oil and gas companies and refineries to increase production and refining capacity.