On Thursday, The Washington Examiner reported that the Organization of Petroleum Exporting Countries (OPEC) has agreed not to increase its production of oil in October as it had planned. The price has dropped too low, and if the supply is lower, the price will go higher. It’s the basic law of supply and demand. It is also the reason America needs to be energy independent. How much money (tax revenue, lower energy costs for the government, transportation costs for oil, etc.) would we save if America was again a net exporter of oil and natural gas.
The article reports:
OPEC+ agreed to pause its planned oil output hike for October and November as prices have dropped to their lowest in months.
The oil-producing bloc revealed on Thursday that eight member countries, including Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman, have agreed to extending cuts.
The decision reverses a planned increase in oil production to 180,000 barrels a day in October.
The eight countries have agreed to cut production by 2.2 million barrels per day through the end of November. These cutbacks will be phased out starting Dec. 1, according to the group.
In Thursday’s announcement, the group said two of the member countries, Iraq and Kazakhstan, have been overproducing barrels since January.
The article notes:
Crude oil prices, which had fallen to the lowest levels of the year in recent days, rose in reaction to the news that the production cuts would be extended. Benchmark Brent crude was up about 0.6% late Thursday morning.
Low prices have alleviated some pressure on consumers amid rampant inflation, keeping oil and gas prices top of mind for voters ahead of the 2024 presidential election. Industry experts warned that the production increase could have caused prices to drop even further, reaching as low as $50 a barrel, Bloomberg reported.
It would be nice to see prices stay in a range that would give consumers a break.