Gas Price, Commodity Outlooks As Biden Prepares for Midterm Elections

  • The Democrats are trying to prove their market and economic record ahead of the upcoming midterm elections.
  • The White House has stressed falling gas prices and its tough stance on China.
  • Joe Biden is also considering a ban on Russian metal imports as the war in Ukraine drags on.

President Joe Biden and the Democratic Party are struggling to prove their track record in the markets and in the economy ahead of the midterm elections.

Voters will assess Biden’s performance on issues such as rising prices at the pump, trade ties with China and the economic impact of the war in Ukraine on November 8.

Here are three market stories that will be front and center for Democrats ahead of the midterms:

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Gas prices and OPEC+

Gas prices surged above $5 a gallon in June as Western sanctions on Russia squeezed crude oil supplies. They fell to $3.91 a gallon Thursday — but rose last month for the first time in 99 days, according to data from the American Automobile Association.

The White House has repeatedly pointed to falling prices at the pump, which have brought much-needed relief to American motorists at a time when inflation is heating up.

Biden urged OPEC+ members to increase crude production to keep gas prices low. But the cartel – which counts Russia and Saudi Arabia among its most prominent members – voted instead to cut its production by around 2 million barrels a day.

That could push prices up at the pump on the East and South Coasts, as well as the Northeast and Rocky Mountains, GasBuddy strategist Patrick DeHaan said last week.

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China and Semiconductors

Biden also cracked down on China before the midterms.

His administration last week introduced export controls restricting the sale of semiconductors made with US technology to companies with a special license.

Chinese chip stocks slumped on the announcement – while US-listed giants Nvidia and Advanced Micro Devices were also down over 1% each.

The Philadelphia Semiconductor Index, which tracks the 30 largest U.S. chipmaker stocks, is down nearly 44% this year — meaning it significantly underperformed even the 25% loss suffered by the benchmark S&P 500 .

Biden’s export controls could fuel further sell-offs, analysts have warned.

“It’s as if the market is suggesting that the last two years of semi-growth was a mirage constructed by central banks that needs to be wiped clean,” Bank of America said in a research note this week.

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Russian metal sanctions

The next big political move for Democrats could be to impose more sanctions on Russia – as Biden is trying to show that he is cracking down on Moscow.

The Biden administration is considering restricting imports of Russian aluminum, Reuters reported Wednesday, citing sources familiar with the matter.

With imports of Russian oil and gas already banned, this policy would aim to choke off another potential revenue stream for Russia and Vladimir Putin.

Aluminum prices rose 5.8% to $2,330 an ounce after Reuters reported the potential import ban, while the Dow Jones Aluminum Index rose 7%.

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