Joe Biden's Election Odds At Risk From Rising Oil Prices, Scolds Ukraine For Attacking Russian Oil While US Supply Set To Dip

According to offshore oddsmakers, President Joe Biden's odds to win the 2024 election are at +150, giving him an implied winning probability of just 38.46%.

Pew Research Center found that 73% of Americans said strengthening the economy "should be a top priority for the president and Congress to address this year," the highest priority out of the 20 total options in the survey.

It’s especially crucial for Biden to address as only around "3 in 10 Americans currently rate economic conditions as excellent or good," according to Pew. It explains Biden's lowest approval rating for any president in March of the last year in their first term in over 44 years, according to Gallup polling data.

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One concern that the Biden administration risks facing is rising oil prices, which have soared to start the year in large part because of geopolitical tensions around the globe as well as supply cuts.

The United States Oil Fund LP USO, which tracks short-term oil futures, is up about 17% to start the year as prices surpass $80 per barrel. Meanwhile, a recent report from Bloomberg citing data from the AAA Automobile Club sees average prices at the pump hitting $4 this summer.

"Nothing terrifies a sitting American president more than a surge in pump prices during an election year," Bob McNally, president of consultancy at Rapidan Energy and former White House energy adviser told Financial Times

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The Biden administration recently scolded Ukrainian attacks on Russia's energy infrastructure, in part because of concern that the attacks will drive oil prices higher. In addition to Russia's oil being a target of the Ukrainian military, the Russian government has ordered companies to reduce their oil outputs, adding a cap to supply.

Russia's actions to cap supply could lead to $100 per barrel oil prices, according to JPMorgan Chase & Co.'s JPM Global Commodities Research Team. 

All the while, the frenzy of deals in the oil-rich Permian basin is set to dim U.S. oil production. 

Reuters cites market participants saying that the Permian basin will see the slowest growth in oil production since 2021. The position stems in part from larger public companies tending to focus on returning capital to investors, while the private producers being acquired were generally more willing to boost output.

Warren Buffett backed Occidental Petroleum Corp. OXY CEO Vicki Hollub, who predicted an impending supply issue earlier in the year saying that "in the near term, the markets are not balanced; supply, demand is not balanced,” and “2025 and beyond is when the world is going to be short of oil.”

While Biden has in the past called oil companies "greedy" and "war profiteering," he ironically might need U.S. oil companies to keep drilling to not have oil prices get out of control as election day nears.

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