Volatility continues to weigh on oil markets, US Energy Secretary Jennifer Granholm said on Saturday, repeating calls for more supplies.
Asked to comment on the state of the oil markets, CNBC’s Sri Jegarajah said “there’s no question there’s a volatile environment and … there’s a lot of debt” — a situation the White House is monitoring.
“There’s a lot of emotion in these markets, and that’s why we’re deeply concerned about the trajectory of where things are going,” the energy minister added.
Granholm said she expects U.S. oil demand to rise to 12.5 million barrels a day this year and post further gains in 2024.
Despite this, Granholm also called for additional production to help lower prices.
“We want to see more supply … It’s dangerous when prices are so high,” she said. “I think the prudent course of action is to make sure transportation is available for people, and that obviously means making sure the supply is stable.”
Some members of the Organization of the Petroleum Exporting Countries and their allies – collectively known as OPEC+ – are voluntarily cutting production by a combined 1.66 million barrels per day until the end of 2024. Coalition heavyweights Saudi Arabia and Russia announced further voluntary cuts in July and August involving 1 million barrels per day of output and 500 barrels per day.0
High oil prices continue to be a challenge for the Biden administration, and cost-cutting remains a priority.
“We want prices to come down. The president is really focusing on the impacts on real people who need to get to work and can’t afford that kind of premium,” Granholm emphasized.
The US has historically been a vocal proponent of lower prices at the pump in an effort to ease pressure on consumer households and curb inflation. Washington has repeatedly asked OPEC+ producers to support the effort by increasing their output – culminating in a brief protection war with Saudi Arabia in October last year.
The US now faces lower inflation, with the consumer price index showing a 3% year-on-year increase in June.
Renewable resources
Granholm also discussed the importance of the transition to renewable energy sources – a key theme of this year’s energy summit.
“China and the United States are the largest emitters in the world … Their citizens are feeling the effects of these extreme weather events,” Granholm said, adding that the US wants to “find an oasis” by working with China to implement clean energy.
“We have to do everything, everywhere, at once. Deploy, deploy, deploy clean energy. Because if we don’t, our planet is on fire and we have to deal with it.”