Oil prices fell Friday after President Biden warned it will take months for the U.S. to get a handle on the COVID-19 pandemic.
West Texas Intermediate crude oil was trading down 62 cents at $52.51 per barrel. The energy component was trading at a more than two-week low before more than halving earlier losses.
“President’s words matter,” wrote Phil Flynn, senior market analyst at the Price Futures Group. “Oil prices are falling as President Joe Biden warns of dark days ahead.”
New coronavirus cases in the U.S. totaled 190,630 on Thursday, the lowest since New Year’s Day. The decline has come as more Americans are getting vaccinated. Despite the drop in cases, Biden worries the virus still isn’t under control.
“Let me be very clear, things are going to continue to get worse before they get better,” Biden said at the White House.
On Thursday, he issued a slew of executive orders aimed at slowing the spread of COVID-19, including ramping up the number of vaccines and vaccination sites and extending mask requirements on interstate travel.
A day earlier, he ordered the extension of a freeze on student loan payments and on the eviction and foreclosure moratoriums for those impacted by COVID-19.
Biden earlier this month outlined a $1.9 trillion plan that would provide further support to the economy, but the proposal has been met with resistance from Republican senators, including Mitt Romney of Utah and Lisa Murkowski of Alaska, who say they want to see the impact of the recently passed $900 billion package.
Also weighing on market sentiment were other Biden executive orders which could dampen the economic rebound. Biden canceled the permit for the Keystone XL Pipeline and suspended the issuance of new permits on federal lands and waters, among other things.
But the drop in oil prices is likely only temporary, warns Flynn.
“Now with the Biden administration putting more pressure on the industry, we will more than likely see more bankruptcies and job losses,” he wrote. “That will also mean in the long run much higher energy prices even as prices fall in the short term on COVID-19 concerns.”
Credit: FoxNews (foxbusiness.com/markets/oil-price-biden-coronavirus-warning)