US consumers struggling under the twin challenges of high inflation and elevated consumer prices are finally seeing some relief as the price of oil and natural gas comes down.
The US national average price for a gallon of gas toppled to $3.35, a price not seen in seven weeks.
The short-term cost of home heating is also looking much rosier. Natural gas futures dropped by almost half in the last two months. The price of natural gas fell by more than 11% on Monday, its lowest day in nearly three years.
Demonstrating the power of government policy adjustments, the pump price of gas started slowing as soon as credible rumors of a Biden administration energy market intervention began to swirl.
When President Biden announced the largest ever release from the Strategic Petroleum Reserve on November 23, oil prices shifted to 10% below their peak.
What does this mean for me?
This kind of market intervention is a clear example that governmental-led manipulation of world markets works. With high oil prices contributing to inflation and higher consumer prices, the Biden administration felt it had no option but to intervene.
As a commodities trader, it is always a good idea to understand the short- to medium-term sentiment around your chosen commodities.
Headline news such as the US releasing some of its strategic oil reserves to OPEC would have served as a warning that change was on the way for oil prices.
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