Posted on 12/29/2022 1:54:54 PM PST by Hojczyk
Looking forward
Despite the OPEC+ cuts, Biden still managed to drag oil prices down to below $80 per barrel today after a high of over $120 per barrel this summer, largely through his administration’s decision to sell 180 million barrels of crude oil through the United States' Strategic Petroleum Reserve this year.
But now that the reserve has been mostly emptied, the United States has limited tools at its disposal to ensure prices stay low, analysts say. “OPEC+ remains the swing producer in the global oil market and could counter any response by the US to lower prices with even greater firepower,” Matt Smith, lead oil analyst for Kpler, told Al-Monitor.
Yet the OPEC+ production cuts are only one of myriad volatile factors that will determine oil prices next year. Some economists warn of a looming global recession, which would drag down oil prices. Others project China’s emergence from its pandemic restrictions to spike global oil demand and exert upward pressure on prices.
But Biden’s depletion of the reserves is why at least some analysts are projecting oil prices to begin rising again next year.
“A lot of this drive down in prices has not been fundamentally based. It's been sort of artificial, so when the fundamentals start to be felt," said Dicker, oil is "going to take off like a rocket.”
A rise in oil prices may augur more trouble ahead in US-OPEC+ relations.
“If oil prices hit triple digits next year, and the economy is not good, then I think we're definitely going to see the [Biden] administration do more OPEC+ shaming,” said Wald. Congressional pressure to combat OPEC+ could be even stronger. She mentioned that if oil prices continue to rise, US politicians may reintroduce the No Oil Producing and Exporting Cartels Act, which, if passed into law, would allow the US attorney general to sue the organization under antitrust grounds. Wald said that such an extreme measure is improbable, and Biden would likely veto the bill if it passed through Congress.
Other analysts predict that 2023 may bring some relief to US-OPEC+ relations. “I think a lot of people in Washington have calmed down a bit about this,” said Sullivan, adding that he thinks they realized that “it's much more important to continue US bilateral relations with important states like Saudi Arabia … rather than let this OPEC+ decision split the US away from them.”
My understanding of the oil reserve is that well under 1/2 was sold and that the daily output from same was but a VERY small fraction of the world’s daily use.
Drill, baby, Drill!
[and build more pipelines]
And the cherry on the parfait? Refilling the depleted reserve will push world prices upward.
If only there was a massive relatively political stable continent, not run by 7th century Islamic tyrants or commies, with massive oil reserves and infrastructure to supply the world with oil. Just imagine...
This and our oil policies right now, are two reasons whyI think
Obama is behind everything Biden does.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.