“Sing Tao Daily” published on November 21 titled “Inflation Slumped in Governance, Biden Curbed Oil Price to Fight Fire”The full text of the review article is as follows:
The high inflation fever in the United States undermines President Biden’s popularity and governance. Therefore, he has made fighting inflation a top priority. In order to suppress inflation, he should first curb oil prices. It increased production and asked its allies, Japan and South Korea to release oil reserves with the United States. Even when China and the United States were not friendly, they sought China’s help. At home, they opened fire on energy companies and asked to investigate oil companies to drive up gasoline prices. . However, the market estimates that the effect of Biden’s approach is short-lived, and oil prices will remain high this winter.
The U.S. inflation rate reached 6.2% in October, a 31-year high. It aroused dissatisfaction among the people and angered Biden’s administration. His popularity dropped to the lowest level since he took office. The support rate was only 40%. As a result, Biden’s attitude towards inflation has changed drastically. He no longer regards inflation as a temporary high, and instead puts the fight against inflation as his top priority.
For Biden to suppress inflation, the first priority must be to suppress oil prices. This is because American citizens have no access to cars, and they need heating in winter. The high oil prices directly hit the people’s wallets and became the source of their anger against Biden. Take the price of gasoline as an example. The current average price per gallon is US$3.4, an increase of 60% over the same period last year. It is estimated that it will rise to US$4 this winter. Why not make people complain.
The policy is accused of fueling the fire
Biden aroused public grievances, not only was accused of ignoring inflation, his policies were also blamed as an inflation fuel. One of the reasons for the high inflation is port congestion, which pushes up prices of daily goods under the shortage of supply. Many people think that it is related to Biden’s ineffective control of the epidemic, resulting in insufficient manpower for terminals and transportation. On the other hand, in order to actively combat climate warming after taking office, he introduced a number of measures to curb the petrochemical energy industry, including closing an oil pipeline from the United States to Canada, suspending new oil and gas leases on federal land and waters, and strengthening the petrochemical industry’s efforts. Environmental protection regulations, etc., the U.S. energy industry criticizes that the high gasoline prices are caused by Biden’s policies.
In addition, after Biden took office, he launched a number of major plans to revitalize the economy. In addition to the US$1.9 trillion in employment assistance and business plans at the beginning of the year, Congress passed a US$1 trillion infrastructure plan earlier this month, as well as a project of 17,000. The $50 billion social welfare expenditure plan has just passed the House of Representatives and will be submitted to the Senate. The Republican Party of the United States has always opposed Biden’s spending money, and now it is accusing him of spending so much to stimulate inflation. High inflation may also hit Biden’s performance in revitalizing the economy. Under inflationary pressures, the Fed will not only reduce debt purchases, but may also introduce monetary tightening measures such as interest rate hikes, which will dampen the pace of economic recovery and may also lead to the rise of U.S. stocks. fall.
In addition, high oil prices also highlighted Biden’s diplomatic weakness. In order to stabilize the international oil price, which has soared by more than 70% this year, Biden has repeatedly pressured OPEC+ for more than a month to increase production, but OPEC+ rejected it. The reason for OPEC+ is that the current shortage of oil is only a short-term phenomenon, and supply may exceed demand after the end of the year. In fact, OPEC+ has complaints about the United States. In March last year, when the new crown epidemic broke out, US speculators stepped on oil prices, causing oil futures to plummet to a historical low of minus 40 US dollars per barrel. This has caused international oil prices to fall for more than half a year, and some oil-producing countries almost went bankrupt. . OPEC+ is pleased to see that oil prices are currently high. How can it “pump rice” and speed up production to suppress oil prices.
The effect of the tricks is limited
OPEC+ refused to follow Biden’s command. Biden wanted to suppress oil prices. He had to release oil reserves to increase its momentum and asked Japan and South Korea to respond. However, Japan and South Korea declined Biden’s request on the grounds of their own laws, and Biden did so. Turn to seek Chinese cooperation. Although Sino-US relations have not actually improved, Biden also asked China to release oil reserves at the Xibai Summit of the top leaders of China and the United States earlier. Since curbing oil prices is also beneficial to China, the Chinese side did not reject Biden’s request to save some diplomatic face for Biden. However, the market believes that the release of oil reserves is limited and the effect on suppressing oil prices is short-lived.
In addition, Biden has taken other measures to curb oil prices, including writing to the Federal Trade Commission, accusing oil and gas companies of driving up gasoline prices and harming consumers, and accusing oil and gas companies of using profits as dividends and repurchases when oil prices are high, but refuses to accept them. Increase investment. But his move is more likely to be a political shirking, and it will not help increase supply or reduce oil prices. US energy companies have accused Biden of diverting their attention and using them as scapegoats.
Biden seems to try his best to suppress inflation and stabilize oil prices, but his tactics are limited, and some of the methods are contrary to his goal of fighting climate warming and revitalizing the economy, so the effectiveness is doubtful. Biden failed to curb oil prices, and international oil prices are still likely to rise but never fall this winter.