Oil prices are falling; President Biden may go for temporary suspension of federal tax on gasoline

22 Jun 2022 , 09:13 AM

Oil prices fell sharply in early trade on Wednesday. WTI crude futures in the United States declined $1.34, or 1.2%, to $108.18 a barrel, while Brent crude futures slid $1.33, or 1.1%, to $113.32 a barrel.

As the US battles rising gasoline costs and inflation, US President Joe Biden is poised to ask for a temporary suspension of the 18.4-cent-per-gallon federal gasoline tax on Wednesday, according to a person briefed on the proposal. On Monday, Biden stated that he was considering calling for a tax moratorium.

Seven oil corporations are scheduled to meet with President Joe Biden on Thursday, under pressure from the White House to lower fuel costs as they post record profits.

Despite inflation concerns, demand is projected to rise to pre-COVID levels, and supply is expected to trail demand growth, keeping the market tight, as trading giant Vitol and Exxon Mobil Corp pointed out this week.

Oil sanctions imposed by Europe on Russia for its invasion of Ukraine, which Moscow refers to as a “special operation,” have yet to take effect, implying that supplies will only tighten more.