Author: Qi Dezhi

  The latest data from the American Automobile Association (AAA) shows that on June 11, local time, the average gasoline price in the United States rose to $5.004 per gallon (a gallon is about 3.7 liters).

This is the first time in U.S. history that the average gasoline price has topped $5, up from $3.077 a year ago.

  Continued soaring energy prices, driving US inflation continued to rise.

Data released by the US Department of Labor on the same day showed that the US consumer price index (CPI) rose 8.6% year-on-year in May, hitting a new high in 40 years.

In its report, AFP called it a "devastating inflation report."

  This data means that U.S. President Biden's efforts to curb inflation have had little effect.

Biden then pointed the finger at the big oil companies, accusing them of taking advantage of supply shortages to make huge profits, "Exxon Mobil has 9,000 drilling licenses, but they don't drill. Why don't they drill? Because they don't have to produce more oil. make more money."

  Regarding Biden's statement, Qi Haishen, president of Beijing Teyi Yangguang New Energy, said in an interview with a reporter from China Business News: "This shows that the inflationary pressure transmitted by the rise in energy prices in the United States has been very big for Biden. In order to solve this problem, in addition to finding ways to increase supply, release strategic reserves and adjust taxation and other related policy means and measures, it is also urgent to adjust the energy supply structure.”

  Chen Jia, a researcher at the International Monetary Institute of Renmin University of China, told "On the one hand, the peak energy demand in summer, on the other hand, the current supply bottleneck of fossil energy cannot be solved. Two reasons have caused the international oil price to remain high."

U.S. oil prices surge 62% in a year

  Average retail prices hit $5 a gallon, according to AAA.

That figure, 63 cents higher than a month ago and nearly $2 higher than a year ago, when the average U.S. gasoline price was $3.07 a gallon, has surged 62% in a year.

For American consumers, this is an unprecedented event.

  The peak U.S. travel season has just begun, and consumer demand has jumped to its highest level this year, compounding the shortage of supplies.

According to AAA data, this round of increases in U.S. gasoline prices began in mid-April. The average gasoline price in at least 19 states in the United States exceeded $5 per gallon on the 11th, mainly in the western and northeastern United States.

Among them, California has become the state with the highest oil prices in the United States, with an average oil price of $6.43 per gallon.

  "Forget about $4 a gallon! We've never had this before, and there's more uncertainty to come," GasBuddy analyst Patrick DeHaan said in a statement. certainty."

  AAA spokesman Devin Gladden also said things could get worse as oil demand continues to outstrip global oil supply, pushing prices higher.

  U.S. Treasury Secretary Yellen previously warned at a media event that gasoline prices were unlikely to fall anytime soon and that "gasoline prices are driving higher inflation expectations, at least at the household level."

  The data showed that the U.S. energy index rose 34.6 percent from a year earlier, the largest year-on-year gain since September 2005.

Among them, the gasoline index rose 48.7%, and the fuel oil index more than doubled to 106.7%, the largest increase since the data was recorded in 1935.

In addition, electricity and natural gas prices rose by 12% and 30.1% year-on-year, respectively.

  The simultaneous surge in energy, food and housing prices has largely affected consumer spending by lower-income households.

The National Association of Energy Assistance Directors estimates that U.S. low-income households will spend 38% of their annual income on energy in 2022, up from 27% in 2020.

  In response to rising domestic oil prices, the Biden administration has announced the release of the Strategic Petroleum Reserve three times since November last year.

At the end of March this year, Biden announced the largest release of strategic oil reserves in U.S. history: 1 million barrels per day within 6 months, with a cumulative release of 180 million barrels.

  "For the White House, soaring oil prices are an obvious problem, but there is no clear solution yet." The US media quoted a poll in early June as saying that 85% of American voters believed that inflation was "very serious" or "serious" problems.

  Chen Jia judged from the two aspects of supply and demand, "there is little evidence that international oil prices will drop soon."

"They make too much money"

  Record oil prices have been one of the main reasons why U.S. inflation is at its highest level in 40 years.

Now that the crucial midterm elections are only five months away, both oil prices and inflation are serious challenges for Biden.

  For months, Biden has tried to reassure Americans that the U.S. government is doing everything it can to bring down energy prices and inflation without derailing the economic recovery.

However, the CPI in May rose by 1.0% month-on-month, much higher than the 0.3% month-on-month increase in April; it rose by 8.6% year-on-year, the highest level since December 1981.

  An angry Biden took aim at Big Oil.

"We're going to make sure everyone knows about Exxon's profits. Exxon made too much money last year," he said at an event in the Port of Los Angeles.

Previously, Biden has been emphasizing that the conflict between Russia and Ukraine has pushed up U.S. gasoline prices.

  Regarding the reasons why American oil and gas manufacturers refused to increase production, professional investor Cheng Yu analyzed in an interview with a reporter from First Financial: "Although the profit margin of oil refining has increased significantly, this is a short-term impact caused by various factors at present. The Federal Reserve Inflation is in full swing, and geopolitics are unlikely to last for more than a decade. But the payback period for refineries is long. Refineries that look likely to be profitable now may face long-term losses or Serious challenges such as insufficient yields.”

  “The global policy direction now is to get rid of fossil energy. The environmental cost of building a refinery in the United States is very high. At the same time, due to the equipment and the labor shortage currently faced, if you build a refinery, it will lead to actual costs. Therefore, from the perspective of factors such as the investment cycle of the refinery itself and the cost environment, it is impossible to determine whether it is suitable to build a new refinery in the United States at least at present.” Cheng Yu said.

  Another U.S. energy giant, Chevron CEO Mike Voss, also complained that the U.S. government's policy has long been to reduce demand for petroleum products.

The Chevron executive also said costs are expected to increase by about 10 percent next year as economic pressures on equipment and labor shortages continue to hurt the oil industry.

  "The United States itself does not lack oil and gas resources, but oil and gas companies are unwilling to continue to invest in expanding output, because the existing energy prices have allowed them to enjoy the benefits. When the fossil energy industry gradually gives up the stage center to the renewable energy industry, more accumulation Wealth and less development of existing resources are the way to survive, and then we will talk about how to transform and upgrade the energy structure. The fossil energy era of 'resource development' is rapidly changing to the era of 'industrial production' new energy. Under the background of great changes in the way of energy production and consumption, no oil and gas resource company will easily 'sell' their own products at a low price." Qi Haishen analyzed the first financial reporter, this is also the White House's recent increase in the development of clean energy. main reason.

  The Biden administration announced last week that it would end tariffs on solar panels in four Southeast Asian countries (Thailand, Vietnam, Malaysia, the Philippines) for the next two years under the Defense Production Act, as part of a plan to push for clean energy.