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President Biden gets a break on oil and gas prices

Yahoo Finance's Rick Newman breaks down the factors contributing to lower oil and gas prices and what it means for President Biden's approval.

Video transcript

ZACK GUZMAN: But first, I want to kick things off in the noon Eastern time hour here with a closer look at the latest jobs report we got, as President Biden took time today to address the nation and indicate-- tried to sell it on the fact that the recovery is still on solid footing, even though that number came in at less than half than what economists were expecting. Of course, President Biden has also been active on addressing a lot of the other issues top of mind for US consumers, including pain at the pump and overall inflation continuing to rise.

And for more on that, I want to bring on Yahoo Finance's Rick Newman to kick us off today, with a closer look at maybe some of the things helping President Biden in resolving some of those issues. And Rick, I mean, when we talk about gas prices, kind of benefiting from some of the concerns here, as well as OPEC Plus's moves to increase supply recently.

RICK NEWMAN: Yeah, it looks as if Biden and American drivers are going to get a break on oil and gas prices. Three things have happened recently to send gas prices downward-- unexpectedly, I might add. First, President Biden said he was going to release 50 million barrels of oil from the US Reserve. That's not a lot of oil relative to total global supply. And that in itself really would not have moved oil markets very much.

But then we got the big sell-off because of the spread of the omicron variant, as you were just mentioning. This now looks like it's going to suppress global economic activity, at least for a couple of weeks or a couple of months. And then OPEC Plus, the cartel of oil producing nations, said recently that it's actually going to increase oil production a little bit. Now after Biden had said he's going to release that oil from the US Reserve, energy analysts thought that what the OPEC nations might do is actually curtail production because they want to see prices up.

But it's possible the Biden administration leaned on some of those nations. China may have done that as well. It's the biggest oil importer. And so they said they're going to increase oil production. And so we've got WTI, West Texas crude futures down now about 12% from where they were right around Thanksgiving. That's a pretty big drop in a short period of time. Wholesale gasoline prices are already coming down. And Moody's Analytics said recently that we could see gasoline prices, pump prices down to around $3 a gallon by the end of the year or early next year. So, a break for consumers is coming. Whether it'll last is another question.

ZACK GUZMAN: And then you got to factor in the higher costs when it comes to summer grade gasoline, as we've had some oil guests talk about, always a little bit more expensive. Could carry over, but all depends on where oil goes from here. Rick Newman bringing us the latest there for at least one thing improving for President Biden.

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