Oil plunges nearly $5 as Biden calls for fuel tax cuts

Oil prices fell sharply on Wednesday, amid efforts by US President Joe Biden to cut fuel taxes in order to reduce costs incurred by drivers in light of the strained relationship between the White House and the US oil sector.

By 0918 GMT, Brent crude futures fell $4.65, or 4.1 percent, to $110 a barrel, while US West Texas Intermediate crude futures fell $5.08, or 4.6 percent, to $104.44 a barrel.

Earlier in the session, the two stocks lost more than six dollars each, reaching their lowest levels since May 19 and May 12, respectively.

A senior administration official said Biden is expected to ask Congress on Wednesday to approve a three-month moratorium on a federal gasoline tax of 18.4 cents a gallon and to call on states in his country to suspend their fuel taxes.

And lawmakers from both parties in the United States expressed their opposition to suspending the federal tax on fuel.

Biden is expected to make the announcement at 1800 GMT.

The White House asked the chief executives of seven major oil companies to attend a meeting this week to discuss ways to increase production capacity and reduce fuel prices by about five dollars a gallon while achieving record profits for those companies.

And giants Vitol and Exxon Mobil indicated this week that expectations are still that global supply is expected to lag behind demand growth.

The International Energy Agency also said on Wednesday that the $2.4 trillion investment to be pumped into the energy sector this year includes record spending on renewable energy sources, but it will not close the supply gap and address climate change.

Government data on Tuesday showed that US refining capacity fell in 2021 for the second year in a row.