administration, did not affect the price of oil substantially. what happened in the biden administration has not affected the price of oil substantially. releasing a bunch of oil from the spr did have an impact on the price, but a short-term one. so, i think the thing i would really want to remind people and encourage people to think about when all the things you see on the news and headlines make you think differently, remember that presidents do not control how much oil comes out of the ground. they don't control the price of oil which is set on a global market. doesn't mean what they do is important, it is important but it's not because of the trumpet ministration did something that kept our prices low. that's not true. it is not true that biden administration did something to put prices up. it's not how it works purpose energy report for -- you can find more of her writing at ee news.net. thanks so much for joining us pick >> thank you.

appreciate it. >> we are back with jim of snp global commodity insights. is the vice president there and head of research for oil markets, energy and mobility. jim, welcome back to the program. >> thank you pick >> tell us about snp global commodity insights and what kind of research you do. >> it's part of snp global, the commodity insights is what we do we give price assessments for energy, david print is the most well-known key will benchmark but we do a lot of research into what is going to do and what we think is going to happen in the energy markets week out to many years out. specifically my focus is on the oil market. >> let's talk about gas because the fourth of july weekend is upon us and a lot of people are going to be on the roads. the aaa shows that the national average for gas is 350 gallon so that is about the same as last year but about a dollar

lower than it was in 2022. can you talk about the factors that drive the gas price and how -- why it goes up and down? >> the price of gasoline in the united states, the biggest reflection of it is what happens in the global crude oil market. the global crude oil prices the biggest single factor that goes into the price of gasoline. one global crude oil prices are high, like in 2022 after the question invasion of ukraine, one of uncertainty about the future of question oil supply, prices went up and led to higher gasoline prices. since then, production has gone up in the united states, so crude oil prices are quite a bit lower than they were two years ago, and that explains why prices are lower today for gasoline compared with 2022. >> since oil is really what drives it or the majority of the price, oil prices hit $87 a gallon -- a barrel yesterday.

that is up 1%, so what is driving that? you mentioned geopolitics, what else? >> well, oil prices are up from when they were about a month ago and they go up and down and continue to do so but the reason that explains prices going up over the last month is a tighter oil market, so opec plus, opec plus our partners that cooperate on oil supply, they have maintained their production restraint, so as demand goes up in the summer in the world, which it does because you mentioned all of the americans driving and many other countries do as well, so that has led to a tighter market where we are likely to see inventories for oil go down. when you have lower inventories, that tends to push prices higher and that is the dynamic that is underway right now. >> we are talking about the global oil markets, gas prices

with jim burkhard of s&p commodities . you can call in and ask a question, make a comment. the lines are democrats -- 202- 748-8000 one for publicans and independents it's 202-748-8000 two. this biden administration released 1 million barrels of gasoline from the strategic reserves, that was designed to push down gas prices. what impact did it actually have? >> it's a pretty big global oil market so it takes a lot to have a really discernible impact . i think the impact of that was not so much on the volumes, the u.s. consumes about nine billon girls -- barrels of gasoline a day. i think it was a sign of intent that the biden administration could, and they have said this, use the strategic petroleum reserve and at some point

before the election that they feel gasoline prices are getting too high. >> and there is a hurricane in the caribbean right now, hurricane beryl, category five storm. any impact that is having on oil prices or the supply chain? >> well, it creates a lot of concern and uncertainty. it depends on where hits, how much damage it does. if it were to -- and maybe i'm not a meteorologist so i'm not sure where it will hit, but it did go to florida, and i hope it doesn't, that would have an impact on demand and lower demand for a time for everyone to the gulf coast, texas, louisiana, the question there is, is it affecting offshore oil platforms or does it affect the onshore refineries or both? it creates a lot of uncertainty with regard to its path and the amount of damage that could happen. >> i want to ask you about oil companies and the profits they armang. cnn reported this, and this is a quote from the reporting that says, the top

five u.s.-based oil and s companies by market cap according to s&p obal , exxon mobil, conoco phillips, eog resources and slumber j have ked in more than 250 billion in profits between 2021 and 23. that is a 160% jump compared to the first three years of the pro-big oil trump administration. >> oil prices are cyclical. they go up and down and when prices go up, that tends to help oil company profits and if you compare 2020 with 2022, the price of oil in 2020 the covert year was $40. that was not a good year for oil companies. 2022, the average price was $100 and that reflects a lot of the uncertainty that was related to the invasion of ukraine. if you know what the price of oil is going to be, you have a pretty good idea of where oil company profits may be. i think 2020 and 2022 really provide two examples of the

impact of the oil price on nonprofits. >> president biden has been critical of the oil industry and been trying to push to end fossil fuels, but oil production has broken records over the past three years. >> the u.s. is producing more oil than any country ever has in history and it is a big reason why, after the ukraine invasion, prices came down. it came down after 2022. they didn't go back up. so what drives u.s. production? the u.s. is unique in the world . we don't have one national oil company. we have many private companies publicly held companies, some private companies, and what really affects how they invest is the oil price. it's really as simple as that. when oil prices are high, it tends to lead to more investment, more production when oil prices are low. the opposite. so the u.s. oil industry is really responsive to changes in

the oil price, and if there is a de facto regulator of u.s. oil production, it's not the president or the congress or state owned company, but the price of oil. >> let's take calls now, roland in maryland, democrat. your first pick >> thank you for taking my call. you just shattered that republican trump talking point about drill, drill, drill. he keeps claiming he's going to drill and all of a sudden we have -- guess at the pump. nobody is talking about the only reason we had very low gas price was because of covid and nobody was driving. and now they want to compare that low price during covid --. ukraine war. that's the only reason why gas prices are this high now. so, thank you for the talking

points about drill, drill, drill from trump, just like --. that's why we have very little folks coming --. >> thank you okay. >> the point about prices during covid where they were last year, when it comes to gasoline prices, every driver knows what the price is and it is the relative change within our memories. if you were to take inflation related gasoline prices, they are with a bit lower than they were 10 years ago. but if you compare it to two years ago, yes, it is lower if you compare it to covid, it is higher. it really depends on the psychology of the consumer and what gasoline price they remember paying and how does that compare with today? it's really important if you are looking back at 2022, it's

one-story. if you compare it to covid year 2020, is a different story. >> he also mentioned -- i don't know if you can call it policy of drill baby drill, what impact would that have if there was a change in administration? and that became more of a priority, what happened to the oil markets? probably more of a o longer term issue. a president can more of a medium to longer term issue. the president could decide to offer more leases in the offshore gulf of mexico or encourage more drilling on federal land. those are not things that would impact production in the next year. whoever wins in november will not have that big of an impact on production. you go up three, four, five, six years, the president can indirectly impact oil production. >> in west plains, missouri, joe, good morning. >> gas here is $3.05.

just went up from $2.95 to $2.99. much does a gas station get on a gallon of gas lacks also, let's not forget that traders on the floor of the chicago on the floor of the chicago have been playing the market for 44 years. marketmakers on the floor, there is a heck of a lot to do with the price of anything. three, is it true that a barrel of oil is 38 gallons, 39? could you explain not, please? >> sure. this is the last question i will tackle. it that is pretty straightforward. a barrel of crude oil were barrel of gasoline is $42. when it comes to gasoline station profits, it really depends on the location, where they are. some locations would be more profitable than others. for a lot of locations, the

profits they make are not necessarily from selling gasoline but the other things that they sell. it is a competitive business. there are not too many businesses where you see the price in these big numbers right on the road. for most products that you buy, you don't see that price. there is a lot of competition. if you see the price of gasoline a couple of blocks away that is lower than the one in front of you, you will go to that. it is very competitive and profits depend on a number of other factors like location and other things that a retailer would sell. >> aaa lists the most expensive states for gas, california being at the top and then least expensive with mississippi being at $2.91. how does that work? obviously there is cost-of- living differences but why does that impact the cost of gas? >> it is logistics.

most of the refining capacity in this country miis along the gulf coast, texas, louisiana, mississippi. there is a much smaller transportation cost. a lot of these gasoline's that come for the northeast have to go in a pipeline. you have to pay the pipelined tariffs to get the gasoline from the gulf coast to maryland or new york or wherever you are in the northeast. the concentration of refining capacity in the gulf region really explains why that is such a competitive price in that area. california is unique. they have special formulas related to controlling pollution which does make the price of gasoline more expensive than the rest of the country. >> dave in new york, independent line. >> i am glad you brought up the strategic oil because i know it is the election-year and everything in the price of oil is a huge inflation problem for the democrats.

you talk about only so much relief but, like the guy was saying about the traders, you release a chunk of oil. everything is derivative. you can panic the options market with the government intervention by releasing oil. the other thing i am concerned too is now, saudi arabia has moved over. what you think about that? russia, china, now saudi arabia trying to end that economic blast. probably because they are afraid of western sanctions. >> there is a lot in those questions. the first one, it is a global oil market. over 100 million barrels of oil consumed every day around the

world. the u.s. is the largest producer, largest consumer. no one can exert unilateral influence or control over the price of oil. any u.s. president wants gasoline prices to be lower rather than higher but there is a mixed degree of success on that. no one controls it, saudi arabia certainly doesn't. i would argue u.s. and saudi relations are pretty good especially given how things could have transpired after october 7 with the war on gaza. the u.s. and saudi arabia have made a lot of progress toward developing an agreement that may involve some other factors with regards to israel. in some ways, the relationship, i would say, is better than it was a couple of years ago. brazil, russia, china, india, very important market and they

are very important politically but it is not a monolithic entity. if you look at china and india, are they allies? no. do they share some common interest? yes. there is a lot of interest where they diverse. collectively, a lot of population but it is not a monolithic block that moves in one direction or another. it is a far cry from something like nato. it is not even a treaty organization. >> you are mentioning saudi arabia. president biden had asked opec countries to increase oil production and bring down the price of gas. did they respond? >> well, the u.s. president, whether it is democrats or republicans want more production out of opec. the country has their own national sovereign interest. if you go back in time, there

is a connection that regulated production. opec plus, they don't want prices too low or too high. when they make their decisions, it is based on their read of the market and their own national interest. the actions like continuing their current production i reflects that. one interesting point -- i don't want to get too deep into the oil announcement but opec did announce that they are aiming to increase production later this year. that is a big change. if they do that, that would be the first increase in oil production in about two years. >> i am sure president biden wants that before the election as opposed to after. >> any u.s. president would like that. >> absolutely. >> good morning.

>> good morning. thank you for taking my call. i enjoy the show. i d have two questions that i a going to ask that i was confused about. one is why do presidents want opec to increase production? is it true that back in 2020 with covid and cutting back on using a lot of gas -- was there a price war also going on between opec plus countries and russia over the oil production? saudi arabia wanted to cut back but russia wanted to push out more because they needed money for something, i don't know. is it true they got into a price war where they both increased production and the price of a barrel of oil went down $24 a barrel? on top of that, can donald trump make a call to saudi

arabia and russia where now he got them to end the price war but he got them to agree to cut production by over 900,000 barrels a day. that is one question i wanted to ask. the second question i wanted to ask is, 2022, when the price of gas went up, i know you always say it is the price of oil that regulates but, also, with refineries, they set the price of gas after they buy bewail. in the second quarter of 2022, the price of gas was 7 a gallon. there was some concern about russia and ukraine but russia just kept producing more oil in the price of the barrel came ad down. the price of gas ggwent up and the oil companies made the biggest profits ever in 2022,

which says, they had no problem paying for oil. it was just the overpriced gas. >> let's get some answers. >> you have a good memory when it comes to 2020. when covid first hit in china, it became pronounced in january, february. it was not clear it would spread around the world but you are right. in early march, opec plus met and said, do we cut productions were not? there was a lack of agreement about how serious covid was. nobody really knew in early march how hard it was going to hit. there was disagreement within opec plus about how much to cut or not and that disagreement did lead to the lack of any agreement. what we saw was saudi arabia, a number of other countries increase production dramatically without an

agreement. that lasted through march and april. in fact, for oil traders, on april 20, the price of oil was negative. can you believe that? that is how oversupplied the market was. that did lead to the agreement and president trump, at the time, did play a role in helping facilitate communications between some of the major powers. i would not say he is responsible for the agreement but it is clear he certainly did play a role in it coming about. the other question about refineries, in 2022, there was less refining capacity than there was in 2019. you are right, the amount of refining capacity can play a role in the oil market and the gasoline prices but because of covid, the oil market, demand declined about 20% in the spring of 2020. it was devastating.

paying someone to take your oil, wow. that hit a lot of refineries hard. we saw some refineries close. in 2022, there was less refined capacity than there was before covid and in 2022, we were recovering. the world was recovering from covid. gasoline demand was rising. we had the russian invasion of ukraine. a lot converted all at tonce. it put upward pressure on ukraine. >> good morning. >> okay. my question is, how much does speculation on wall street pay on the price of oil? since i am on the west coast and there is not a pipeline going over the rockies, most of the west coast relies on foreign oil to have been refined. the refinery as you just

mentioned, are facing a problem as well because they're closing down refineries and deliberately driving up the price of gas. if i can go across the border and buy gas for $2 a gallon yet, if i come across the border in california, it is $5 a gallon. mexico's gas is refined in the united states. that is it for me. >> on the role of speculators, this is a perennial question in the oil market. there are speculators driving up the price, they are doing something. first of all, you don't have an open liquid market without speculators. it is about allocating risk. the first futures market in chicago in the 19th century was about farmers wanting to offload risk to people who were willing to take it. you need speculators to have a

market. can speculation increase or intensify through particular trends? market psychology is crucial. do you think the prices will go higher? do you think it will go lower? in any market, psychology of expectations play a critical role. h speculators do not set the price of oil but there can be times when a certain psychology may take hold just like in the stock market where prices can go up or down and that can be intensified. to be very clear, speculators do not set the price of oil. they do not set the price of gasoline and they play a critical role in the functioning of the market. >> diane in new jersey asks what was the impact of drilling being halted on public land?

>> i wouldn't say it has been halted but there have been some restrictions put on land and drilling on a federal land. so far, as of right now, it is tough to say it has had a discernible impact. the u.s. is producing more oil than any country has in history. in the years ahead, restrictions on drilling in some places could begin to maybe have an impact on production but so far, it is difficult to see that when the u.s. is seeing more oil than itd ever has before. richard, independent. good morning, richard. >> i was just wondering why it is not telling the american public the truth. the russian republican trump has done away with most things for the people of the united

states. i call him a russian republican because he is a friend of putin. the reality of oil is they made $200 billion last year. they are still going after more. that is a record amount, year after year. that is not a democratic problem. it will get worse as long as the republicans are in control. do you have a solution for that? also, what about the chevron? why would the chevron have ditched? can you explain why we have that in the first place? >> that is a supreme court decision. i am not the best person to answer that. i am not sure there is a question there. i understand the point you are

making but i would argue that the global oil market is global. there was no one that controls it where oil prices are high. that attracts a lot of attention. when oil prices are low, that does not get a lot of attention. the key here is that oil -- we have always had a cycles of crisis high, low. that dynamic of profitability versus less profitability will continue and companies ma lot of profits that attracts attention. >> last question for you. joseph wants you to address the effects of the market of the russian war and he also asks about the heat dome over the united states.

the heat dome is having -- it does have an impact on electricity consumption through greater use of air conditioning. oil is not used to generate power. probably the heat as well as cold-weather tends to have more of an impact on natural gas which is a very important and v large source of power generation in the united states. >> jim burkart and head of research from markets, energy and mobility, you can find out more online. thank you so much. >> thank you. today, financial industry executives and consumer advocates testify on fraud protection within the zelle network system.

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will address a joint meeting of conghis first visit to the u.s. since the a ss attack -- hamas attack. members of congress plan to boycott his speech. the israeli minister is expected to speak about the ongoing war agmas. he will be the first foreig leader ever to address congress in a t meeting four times. watch live covera his remarks from the house chamber wednesday at 2:00 p.m. eastern on c-span, online at www.pan.org and on our free video app , c-span now. secretary of state antony blinken testified on u.s. diplomacy and the president's 2025 budget request before the house foreign affairs committee. he also talked about the president's recent decision to withhold and continued support for ukraine.