{"id":1808,"date":"2022-10-05T18:39:04","date_gmt":"2022-10-05T18:39:04","guid":{"rendered":"http:\/\/roydadnaft.ir\/English\/?p=1808"},"modified":"2022-10-05T18:59:54","modified_gmt":"2022-10-05T18:59:54","slug":"what-opecs-2-million-barrel-cut-could-mean-for-u-s-gas-prices","status":"publish","type":"post","link":"https:\/\/roydadnaft.ir\/English\/1808\/","title":{"rendered":"What OPEC&#8217;s 2 million-barrel cut could mean for U.S. gas prices"},"content":{"rendered":"<div class=\"entry-content\" itemprop=\"description\">\n<p>OPEC+ is jolting oil markets this week with plans to cut output \u2014 and the ripples could reach all the way to the U.S. midterm elections<em>.<\/em><\/p>\n\n\n\n<p><strong>Driving the news:&nbsp;<\/strong>The coalition of OPEC, Russia and allied producers on Wednesday announced cuts of 2 million barrels per day in Vienna starting in November 2022.&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>It&#8217;s looking to prop up prices that have fallen greatly since early June when Brent crude was above $120 per barrel \u2014 and has already succeeded despite bearish economic signs.<\/li><li>Word of the cuts in the tight global market sent oil prices&nbsp;back upward&nbsp;this week, with Brent crude rising several dollars to roughly $93 Wednesday morning.<\/li><\/ul>\n\n\n\n<p><strong>Why it matters:&nbsp;<\/strong>The crude revival \u2014 if it persists \u2014 will put fresh upward pressure on U.S. gasoline prices, which have already&nbsp;inchedback up&nbsp;lately after months of big declines.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>The ongoing Saudi-Russian cooperation despite Vladimir Putin&#8217;s invasion of Ukraine is also the latest sign of Riyadh&#8217;s strained relations with the White House.<\/li><\/ul>\n\n\n\n<p><strong>Threat level:<\/strong>&nbsp;U.S. officials &#8220;are reportedly working around the clock to stave off a big cut, appealing to countries that it maintains strong defense and strategic ties,&#8221; RBC Capital Markets said in a note. (<a href=\"https:\/\/www.cnn.com\/2022\/10\/04\/politics\/white-house-lobby-opec-oil-production-cuts-gasoline-prices-midterms\/index.html\" target=\"_blank\" rel=\"noreferrer noopener\">CNN has more<\/a>.)<\/p>\n\n\n\n<p><strong>What they&#8217;re saying:<\/strong>&nbsp;&#8220;The President is disappointed by the shortsighted decision by OPEC+ to cut production quotas while the global economy is dealing with the continued negative impact of Putin\u2019s invasion of Ukraine,&#8221; National Security Advisor Jake Sullivan and National Economic Council director Brian Deese said in a statement.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>&#8220;At a time when maintaining a global supply of energy is of paramount importance, this decision will have the most negative impact on lower- and middle-income countries that are already reeling from elevated energy prices,&#8221; they added.<\/li><li>The Department of Energy will deliver another 10 million barrels into the market next month through the Strategic Petroleum Reserve, they said.<\/li><\/ul>\n\n\n\n<p><strong>The big picture:<\/strong>&nbsp;Rice University&#8217;s Jim Krane tells Axios the likely cuts reflect the persistence of Saudi-Russia market cooperation that began a half-decade ago in response to the rise of U.S. shale production.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>&#8220;Putin has been able to insert himself in what was a pretty strong relationship between the U.S. and Saudi Arabia, and he&#8217;s destabilizing that relationship right now,&#8221; said Krane, a fellow with the school&#8217;s Baker Institute for Public Policy.<\/li><\/ul>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p><a href=\"https:\/\/twitter.com\/GasBuddyGuy\/status\/1577678875303321601\"><\/a><\/p><\/blockquote>\n\n\n\n<p><strong>The intrigue:&nbsp;<\/strong>The White House had been aggressively touting the pump price relief for weeks, but a reversal could revive political jeopardy in the upcoming election.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>\u201cHigher prices are bad news for Democrats,\u201d ClearView Energy Partners&#8217; Kevin Book&nbsp;tells Bloomberg.<\/li><\/ul>\n\n\n\n<p><strong>What we&#8217;re watching:&nbsp;<\/strong>How the market responds after the announcement.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Oil analyst Ellen Wald&#8217;s&nbsp;latest column&nbsp;notes more price increases are &#8220;likely to be tempered&#8221; by concerns that a global recession will hurt demand.&nbsp;<\/li><li>GasBuddy analyst Patrick De Haan tells Axios the U.S. gasoline price trajectory will differ regionally, with prices in the Gulf Coast, Southeast, Northeast and East Coast set to rise.<\/li><li>But recent refinery problems and maintenance in the Great Lakes area and West Coast have already bolstered prices there.<\/li><li>&#8220;Once those issues are addressed, the decreases will likely overpower oil prices rising,&#8221; De Haan said, but notes the OPEC+ cut means the amount they decline again will be smaller.<\/li><\/ul>\n\n\n\n<p><strong>Meanwhile,&nbsp;<\/strong>the U.S. has limited options to respond to the OPEC+ cut<em>.<\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>The White House is already deep into a historically large Strategic Petroleum Reserve release.<\/li><li>Production growth, meanwhile, has stalled for now despite attractive prices as companies deal with a mix of supply chain and labor challenges, investor pressure for discipline and more.<\/li><\/ul>\n\n\n\n<p><strong>Yes, but:<\/strong>&nbsp;&#8220;Tighter crude oil markets &#8230; could give the White House further impetus to consider limitations on refined products exports as a brake on rising pump prices,&#8221; ClearView Energy Partners said in a note Wednesday morning.<\/p>\n\n\n\n<p><em>Editor&#8217;s note: This story has been updated with a statement from the White House and details of OPEC&#8217;s planned production cuts.<\/em><\/p>\n<div class=\"post-date no-social-btn post-updated\">Updated on<time class=\"updated dt-updated\" itemprop=\"dateModified\" datetime=\"2022-10-05T18:59:54+00:00\"> 5 October 2022<\/time><\/div><\/div>","protected":false},"excerpt":{"rendered":"OPEC+ is jolting oil markets this week with plans to cut output \u2014 and the ripples could reach all the way to the U.S. midterm elections. Driving the news:&nbsp;The coalition of OPEC, Russia and allied producers on Wednesday announced cuts of 2 million barrels per day in Vienna starting in November 2022.&nbsp; It&#8217;s looking to [&hellip;]","protected":false},"author":1,"featured_media":1809,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[17,36,19,16,1],"tags":[],"services":[],"class_list":["post-1808","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","category-lastnews","category-news","category-oil","category-opec"],"_links":{"self":[{"href":"https:\/\/roydadnaft.ir\/English\/wp-json\/wp\/v2\/posts\/1808","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/roydadnaft.ir\/English\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/roydadnaft.ir\/English\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/roydadnaft.ir\/English\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/roydadnaft.ir\/English\/wp-json\/wp\/v2\/comments?post=1808"}],"version-history":[{"count":0,"href":"https:\/\/roydadnaft.ir\/English\/wp-json\/wp\/v2\/posts\/1808\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/roydadnaft.ir\/English\/wp-json\/wp\/v2\/media\/1809"}],"wp:attachment":[{"href":"https:\/\/roydadnaft.ir\/English\/wp-json\/wp\/v2\/media?parent=1808"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/roydadnaft.ir\/English\/wp-json\/wp\/v2\/categories?post=1808"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/roydadnaft.ir\/English\/wp-json\/wp\/v2\/tags?post=1808"},{"taxonomy":"services","embeddable":true,"href":"https:\/\/roydadnaft.ir\/English\/wp-json\/wp\/v2\/services?post=1808"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}