Oil prices fell more than $4 a barrel on Wednesday as US pressure on the country’s leading energy companies to ease drivers’ complaints and cut rising fuel costs during peak summer consumption.
West Texas Intermediate (WTI) crude futures fell $4.04, or 3.7%, to $105.48 a barrel at 0425 GMT, Brent crude futures fell $3.87, or 3.4%, to $110.78 a barrel.
As the US struggles with rising gasoline prices and inflation, there might be a temporary suspension of the 18.4 cents federal tax on gasoline today.
Seven oil companies under the pressure while making record profits to cut fuel prices will meet with Biden on Thursday. Chevron CEO Michael Wirth said on Tuesday that criticizing the oil industry is not the way to lower fuel prices and that these actions are not helpful in tackling the challenges.
Despite concerns about inflation, demand is still on track to recover to pre-COVID levels, and supply is expected to keep lagging behind demand growth and keep the market tight this week.
Heavy European sanctions have yet to come into play. The market is reckoning with the increasing disruption of Russian oil, with data showing a relatively limited decline in Russian oil so far.
U.S. oil refining capacity fell for the second consecutive year in 2021 as oil plant shutdowns continued to shrink gasoline and diesel producing capacities, according to the latest government data released on Tuesday.
Official data showed a capacity drop of 125,790 barrels per day (bpd) last year, on top of the 800,000 barrels drop in 2020.
