Having no justification whatsoever for doing so, the Obama administration is itself, and by proxy through its apologists, taking credit for low gasoline prices. Further proof, as if any is needed, that Democrats will say anything if they think they can get away with it.
Low gasoline prices are, of course, a mixed blessing here in oil-producing East Texas. But millions of Americans elsewhere in the country are benefitting from the massive drop in the price for a barrel of oil, which has translated to low prices for a gallon of gasoline. If those motorists want to send a thank you note, they shouldn’t send it to the White House.
Three forces have converged to reduce world oil prices. First is the American oil & gas industry. Risking their own money – rather than relying on taxpayer money: see “Solyndra” — American oil producers perfected an extraction technique called “hydraulic fracturing,” or “fracking.” The method has made possible the production of millions of barrels of once unrecoverable oil. America can now be, for the first time in decades, free from the need to import oil. If Congress will change the 1979 law preventing it, America can now be a net exporter of oil. The Saudis have taken notice. More on that in a moment.
The second factor is a slowdown in the once red-hot economies of India and China. China in particular is a huge consumer of imported oil. A marginal drop in demand from that nation has a disproportionate impact on the market price for a barrel.
Finally, there is Saudi Arabia. The Saudis are playing a long game that entails holding on to their market share. The Saudis sit on the largest oil reserves in the world and Saudi “lifting costs,” ie. how much money it costs to get a barrel of oil out of the ground, are the lowest in the world. The Saudis have the capacity to inflict pain on higher-cost producers.
And so they are rather than lose market share. Thus the Saudis are keeping production levels up even in the face of slackening demand, knowing that they, the Saudis, with lower production costs, can outlast North American producers. That excess production is pushing oil prices sharply downward.
For these reasons, and these reasons alone, Americans are – for now — paying $2.00 or less for a gallon of gasoline.
Obama has exactly nothing to do with it. Anyone who says otherwise is either misinformed or deliberately lying.