Oil Prices Slump $6 a Barrel to $102 on Wednesday

Global oil prices slumped on Wednesday on reports that U.S. President Joe Biden plans to slash fuel prices for drivers to ease economic hardship ahead of a potential economic recession projected by several experts.

Brent crude oil, against which Nigerian oil is priced, shed $5.82 a barrel to $108.58, down from $114.4 a barrel it opened the day. It later rebounded slightly to $110.38 at 12:20 pm Nigerian time.

The U.S. West Texas Intermediate (WTI) dropped $6.48 from $109.21 a barrel it opened the day to $102.73 before paring losses to $104.24 per barrel.

Oil Prices Slump $6 a Barrel to $102 on Wednesday

On Tuesday, a senior official of President Joe Biden’s administration was reported to have said President Biden will call on Congress today to pass a three-month suspension of the federal gasoline tax to help ease rising pump prices.

The president is also expected to call for a temporary suspension of state fuel taxes, which are generally higher than federal rates. The senior official added that he will challenge major oil firms to come to a meeting with his energy secretary later this week with ideas on how to bring back idled refining capacity.

“A federal gas tax suspension alone won’t fix the problem we face, but it will provide families a little breathing room as we continue working to bring down prices for the long haul,” a second official said.

Russia’s crude oil sanctions amid an already tight crude oil market continue to sustain higher oil prices. This, coupled with expected high summer demand bolstered oil prices even higher this week.

However, with the U.S. inflation at 8.6% and borrowing costs raised by 100 basis points this year so far, Americans are now complaining about high pumping prices eating into their earnings and household income in general.