is getting closer to the US midterm election, and Biden is also very anxious.
The continued high inflation is likely to make him lose this election, which will inevitably affect his presidency.
Therefore, Biden once again warned domestic oil companies: either increase production or face additional huge profit tax.
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Early this year, Biden sent open letters to several large domestic energy companies, urging them to increase production at the time, but it ushered in unanimous opposition.
This time Biden used the big trick of profit-tax , hoping to force energy companies to increase production and reduce oil prices.
Biden listed detailed data, pointing out that ExxonMobil and Shell have both earned excess profits in the past . The former's profit in the third quarter of this year was three times that of last year, and the highest record in the past 150 years; while Shell's profit in the third quarter was also close to 10 billion, twice that of last year.
means that such super high profits have the basis for imposing huge profits.
Of course, tax collection is not the purpose, the purpose is to increase production.
However, the US oil industry does not seem to buy it. They retorted that the US government has done too little in encouraging the oil industry to increase production.
Since Biden took office, he has been encouraging the development of clean energy, which has affected the investment confidence of the traditional oil industry.
However, it seems that this huge profit tax is very likely to be just a threat and it is difficult to take action.
Because once a huge profit tax is imposed, it will affect domestic oil companies and will reduce domestic energy production. Originally, the United States could basically be content with its own energy, but if production is further reduced, the United States will begin to rely more and more on foreign energy supply. By then, it will not only be difficult to lower oil prices, but will also become more restrained by overseas oil prices. Obviously, this is not worth the loss.
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The above figure is the weekly chart of the price of crude oil in WTI.
We can clearly see from this chart that starting from June, the weekly line is in a significant downward channel.
However, this trend suddenly changed in October this year. The four weeks since October have been in a more obvious volatility rather than a continued decline.
This change comes from the OPECG meeting's counterattack.
is now in November. The meeting decided to cut production by 2 million barrels per day officially take effect, and the impact on the trend of international oil prices may become clearer in the future.
, especially in the past two days, the Federal Reserve will announce the interest rate hike , whether it is 75 points or 50 points, once the resolution is announced, the impact of interest rate hike on oil prices will pass, and the trend of oil prices will depend more on the change of demand and supply.
and OPEC also recently released a new report that makes more specific predictions about future demand.
Whether in the medium term or long term, the global demand for traditional oil is still growing steadily, especially the population of emerging countries is growing, resulting in an increasing demand for traditional energy.
From this point of view, the future oil prices still have strong support.
