Oil Prices Expected To Soar In 2022
U.S. President Joe Biden delivers remarks about the work being done by his administration to implement the Bipartisan Infrastructure Law in the Eisenhower Executive Office Building's South Court Auditorium on January 14, 2022 in Washington, DC.
Chip Somodevilla/Getty Images

Oil prices will hit $100 per barrel in 2022, according to Goldman Sachs.

In a recent note, the investment bank pointed to “robust fundamentals” in the oil market and a “surprisingly large” oil supply deficit, according to a report from CNN Business. Nevertheless, Goldman Sachs pointed to a long-term “reluctance to invest in oil during the energy transition.”

Between November 2020 and November 2021, the average cost of gas increased from $2.01 to $3.40 per gallon in the United States. However, President Joe Biden’s allies have been emphasizing the smallest available signs of momentary cost decreases. 

For instance, the Democratic Congressional Campaign Committee shared a graph on Twitter boasting about a two-cent decline in gas prices, while CNN host Don Lemon recently celebrated the fact that gas prices fell by roughly $0.09 from the previous month.

“A big economic relief for millions of Americans who have been dealing with soaring energy prices,” Lemon said on his program. “Cost at the pump, finally easing up. With the national average for a gallon of regular falling to $3.35. The lowest since October. Just look at that.”

At one point, the Biden administration attempted to address high gas prices by tapping 50 million barrels of oil from the United States Strategic Petroleum Reserve. According to the United States Energy Information Administration, however, the United States consumed roughly 18 million barrels of petroleum per day in 2020 — meaning that the release only amounted to 2.5 days’ worth of consumption.

Meanwhile, BlackRock chief executive Larry Fink called on policymakers to “create a green economy that is fair and just” by fostering access to renewable energy sources, as highlighted by CNN Business. He said that any plan only designed to cut the supply of fossil fuels instead of increasing demand for green energy “will drive up energy prices for those who can least afford it, resulting in greater polarization around climate change and eroding progress.”

Despite BlackRock’s advice, a surprising new proposal from California — which has a reputation for favoring renewable energy — seeks to increase fees for residential solar energy consumption. The California Public Utilities Commission’s suggested policy would “evolve decarbonization incentive efforts to meet the state’s groundbreaking clean energy goals” by creating a “grid participation charge” of $8 per kilowatt for residential solar panel users. 

Tesla CEO Elon Musk called the move “bizarre” and encouraged people to send complaints to Gov. Gavin Newsom (D-CA) through a website set up by the automaker. Among other actions, Tesla recommended that citizens call Newsom’s office, provide verbal comment at upcoming CPUC meetings, and “tweet at” Newsom using the hashtag “#SaveSolar.”

California is also weighing a constitutional amendment that would start a universal, single-payer healthcare system. The net effect would be to “increase taxes by $12,250 per household, roughly doubling the state’s already high tax collections,” according to the Tax Foundation. The top marginal rate for wages would rise to 18.05% — far higher than the nation’s median top marginal tax rate of 5.3%.

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