Do you believe the president sets global oil and refinery prices?
Do you think, if a president DID set prices, that a president WOULD set prices uncomfortably high without controlling both houses, and in an election year with a thin margin in one of the houses, in his first term?
I have seen similar posts all over Facebook. I don't expect every citizen to understand how oil economics work, but it's dismaying how prevalent such a poor understanding is.
- Oil is a global market, with over 30 countries producing.
- There are oil production alliances in place which can either balance or unbalance prices.
- US gasoline refineries are designed to begin with a certain type of oil feedstock that is NOT the kind of oil our country produces. No matter how much oil we produce, we still need to import oil to refine.
- Oil residing in the US is NOT a publicly owned resource. We are a capitalist country. Citizens don't own lumber, minerals, oil, natural gas or any other natural resource.
- US oil, gas, and gasoline can and will be sold anywhere in the world, and will be transacted at global prices. Again, we are capitalist. You won't find $1 gas here when some other country has $4 gas. Remember how much you hate "socialism"? Hugo Chavez ran oil-rich Venezuela as a socialist country and kept gas prices low there. And yet, he was hated here for being socialist. Go figure. A producer will consider the costs to remove it from this market and go sell it in another market where they'll make more money.
- US producers are currently reluctant to use cash reserves to drill more. Labor resources are low. Shareholders want dividends and stock buybacks rather than new drilling investment. Oil as a resource is falling out of favor compared to greener options.
Presidents don't set prices. Period. You don't have to like the guy, but at least be sensible about the range of powers he has and doesn't have.