Americans are still feeling the pain at the pump, as gas prices continue climbing, recently hitting their highest point so far this year, according to Crude Oil Prices Today. As of Aug. 17, a gallon of regular unleaded costs $3.87 on the national average, up from $3.56 a month ago, according to AAA. This represents a whopping 8.7% jump.
As The Hill explained, production cuts from the Organization of the Petroleum Exporting Countries and its partners (OPEC+) since October are a major factor in the prices of both oil and gasoline. And following the organization’s June 4 meeting, Saudi Arabia announced it would cut production, as well.
“The Kingdom will implement an additional voluntary cut in its production of crude oil, amounting to one million barrels per day, starting in July for a month that can be extended, so that the Kingdom’s production becomes 9 million barrel per day, and the Kingdom’s total voluntary cut will be 1.5 million barrels per day,” according to a Saudi Arabia Energy Ministry statement.
The ministry further said at the time that the “additional voluntary cut comes to reinforce the precautionary efforts made by OPEC+ countries with the aim of supporting the stability and balance of oil markets.”
“If not for the OPEC cuts, I think we’d be paying somewhere between $3.25 to $3.50 for gas,” Tom Kloza, global head of energy analysis at the Oil Price Information Service, told The Hill. “They took extraordinary measures and I think those measures are having an impact.”
According to a U.S. Energy Information Administration report, U.S. crude oil production will average 12.8 million barrels per day in 2023 and 13.1 million barrels per day in 2024 — both annual records.
Yet, as The Hill reported, these increases are “not expected to fully offset the cuts in other countries.”
“The U.S. is a bunch of independent producers making their own independent decisions based on their balance sheets,” Naser Ameen, who leads crude oil production forecasts at the Energy Information Administration — a nonpartisan statistics branch of the Energy Department, told The Hill. He added that while the international cuts may create a price signal that encourages more U.S. production, domestic companies would not be expected to fully replace them.
However, according to John Catsimatidis, CEO and Chairman of United Refining Company and Chairman, CEO and founder of Red Apple Group, Inc. which operates Gristedes and D’Agostino’s, America can fight the economic war with Russia and the OPEC nations if we increase petroleum production here in the U.S..
“The goal of those countries is to have oil priced in the high 80s, which they’ve been trying to do for the past several months. They need to keep prices high to finance their wars in Ukraine and in Africa. We can combat this by increasing oil production in the U.S. and bring prices down into the 60s,” he added.
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