No prospect of reducing fuel costs

US Secretary of Energy Jennifer Granholm hinted on Friday that the Biden administration has little chance of getting the country's oil producers to increase production in order to reduce rising fuel costs.

"I wish I had a wand," Granholm told Bloomberg TV, laughing in response when asked what their plan to increase US oil production looks like. "That's hilarious," she added.

U.S. oil production is expected to decrease 260,000 barrels per day (bpd) to about 11 million bpd in 2021 as production is slow to recover from the pandemic, despite increasing demand, according to the Energy Information Administration, an independent arm of the Department of Energy, this month.

This would put production 60,000 bpd below the EIA's previous forecast. Production is expected to rise again to 11.7 million bpd in 2022, but will be below the pre-pandemic record of nearly 13 million bpd in November 2019.

Granholm said oil is a global market "controlled by a cartel, the cartel is called OPEC." President Joe Biden's administration has urged OPEC and its allies, known as OPEC +, to increase production so as not to affect global economic recovery. But this week, OPEC + stuck to its plan of only gradually increasing production, and Brent oil prices rose to nearly $ 83 a barrel on Friday.

"If a price above $ 80 a barrel doesn't make the oil companies pull back from the sidelines, I don't know what else to do," Granholm said. She dismissed the notion that the Biden administration's restrictions on public land drilling leases caused oil and gas companies to curb production, adding that they were not affecting the more than 7,000 public and private land leases reacted that they had.

"They sit on them, they hoard these leases, why is that?" said Granholm.

American shale oil producers Chevron Corp (NYSE: CVX) and Exxon Mobil Corp (NYSE: XOM) signaled this week that their reluctance to produce more oil this year could soon end as they plan to cut their spending next year to increase.

Granholm reiterated that Biden is considering using the strategic oil reserve as a lever to cool prices.

She added that high fuel prices, as seen in Europe, are unacceptable in the United States, although some people believe such prices could encourage the transition to green energy.

"The president doesn't want fuel prices to hurt people and corner them," Granholm said, pointing out that some poor people spend up to 30% of their monthly income on fuel.