November 24, 2022
  • November 24, 2022

OPEC+ eyes major production cut to boost oil prices

By on October 3, 2022 0

Oil prices jumped more than $3 a barrel on Monday as OPEC+ confirmed it was considering cutting production by more than a million barrels a day to deal with continued weakness in the oil market , the wall street journal reported.

OPEC+, which includes OPEC nations and allies such as Russia, has for months refused to increase production to rein in global oil prices despite pressure from major consumers like the United States.

According to CNBC, “A major production cut is set to anger the United States, which has pressured Saudi Arabia to continue pumping more to help oil prices fall further and to cut Russia’s revenue as the West seeks to punish Moscow for sending troops to Ukraine.

If OPEC+ goes ahead with the plan, it would be the biggest production cut since 2020, when OPEC+ cut production by a record ten million barrels per day in response to the plunge in demand due to the Covid-19 pandemic.

Last month, Treasury Secretary Janet Yellen warned that gas prices could potentially rise again in winter as some European countries seek to further limit Russian profits from oil sales.

“This winter, the European Union will essentially stop buying Russian oil,” she said in an interview on CNN. State of the Union.

“And, in addition, they will ban the provision of services allowing Russia to ship oil by tanker. And it is possible that this will cause oil prices to spike,” she continued.

Meanwhile, according to the latest AAA data, the national average price of a gallon of gasoline rose seven cents over the past week to $3.79.

“Regional differences in gas prices are stark right now, with West Coast prices hitting $6 a gallon and up, while Texas and Gulf Coast states have prices dropping below $3. $ in some areas.” AAA spokesman Andrew Gross said in a statement.

“At least six California refineries are undergoing maintenance, and West Coast pipeline supply from locations east of the Rockies is limited,” he continued.

According to data from the Energy Information Administration (EIA), gas demand fell from 8.32 million barrels per day to 8.83 million barrels per day last week, while total national gasoline inventories fell by 2.4 million barrels per day to 212.2 million barrels per day.

“If demand remains robust as supply tightens, drivers should prepare for higher pump prices throughout the weekend,” AAA concluded.

Ethen Kim Lieser is a Washington State-based finance and technology editor who has held positions at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow him or contact him on LinkedIn.

Picture: Reuters.