Posted on 04/03/2023 9:49:44 AM PDT by Red Badger
Saudi Arabia, whose relationship with the United States has taken a nosedive during President Joe Biden’s tenure, announced on Sunday it would lead the members of the Organization of the Petroleum Exporting Countries (OPEC), including Russia, to cut over one million barrels of output a day starting next month, which could cause higher U.S. inflation.
Saudi Arabia also stated it would cut production by another 500,000 barrels a day starting in May. Oil prices soared 7.5% at the week’s open after the Saudi announcement. Kevin Book, managing director of Clearview Energy Partners, told CBS News the cuts could cause U.S. gasoline prices to rise roughly 26 cents per gallon.
The move on Sunday follows OPEC’s decision last October to reduce production by two million barrels a day. “There’s going to be some consequences for what they’ve done with Russia,” Biden threatened in October. “I’m not going to get into what I’d consider and what I have in mind. But there will be — there will be consequences.”
“President Biden said he would make the kingdom of Saudi Arabia a pariah state. That was an enormous mistake,” former Secretary of State Mike Pompeo said. “But let’s look at the facts. They are an important security partner for the United States. There’s only one country in that whole region that wants to threaten the United States of America and Israel and wipe us from the face of the earth. That’s the leadership in Iran and the kingdom of Saudi Arabia’s been an important partner in helping protect us from that threat.”
Unlike the warm relations between the U.S. and Saudi Arabia during the Trump administration, Biden’s actions, including calling Saudi Arabia a “pariah” in 2019 when he was running for president, have alienated the Saudis to the point that they have tried effecting a rapprochement with Iran, their greatest enemy, brokered by China. Saudi Arabia cut ties with Iran in 2016.
“Given the preventive nature of OPEC decisions, there is clearly something OPEC knows about demand trends and inventories that we have yet to discover fully in overall supply and demand balances,” Christyan Malek, global head of energy strategy at JP Morgan, told The Wall Street Journal.
Ole Hansen, an oil analyst at Denmark’s Saxo Bank, opined that the Saudi decision was indicative of their worries that interest rates in the U.S. will increase.
Wayyyy back before the filthy Bidenoids took power, when we were energy independent, we didn’t have to concern ourselves as much with OPEC production cuts.
indeed.
https://www.eia.gov/petroleum/supply/weekly/pdf/highlights.pdf
Weekly Petroleum Status Report
U.S. crude oil refinery inputs averaged 15.8 million barrels per day during the week ending March 24, 2023 which was 437 thousand barrels per day more than the previous week’s average.
Back in the 70s I was laid up for almost a year after a bad traffic accident. I picked up A Milton Friedman book and got interested so for a year I read Economics- von Mises, Hayek, Ricardo and more, even Keynes though I found him unreadable. His paragraphs don’t hang together and his sentences would have got him Ds in old time English class.
Big Unionized Auto gets another EV bailout as expected...
The crown prince is helping Trump
That's because your brain be too structural raciss to feel socialism ...
The only way to understand Keynes is to only read the last sentence of each paragraph, accept his “conclusions” and ignore his argument. There was a theory extant when he was alive that he wrote it as a parody and the socialists and quasi socialists seized upon it because it seemed to justify their nonsense. Those last sentences were essentially unsupported by his argument and as English prose were nonsense. Incomplete sentences that run on for a page and the parts are inconsistent with each other. It makes a lot more sense to take Keynes’ work as that parody and when he was about to have a laugh he realized it SOLD and became then a Keynesian, himself. With all that acclaim he ran with it and the world got stuck with it.
To be candid, I have never managed to read any of his works because of the vast number of morons who enthusiastically endorse them.
Won’t these production cuts mostly not affect the oil price long term considering how many countries in OPEC cheat on their requirements? The oil is still there in the ground.
Same with his followers like Kenneth Galbraith. Lots of formulas and equations but the entire theory is bunk. It rarely addresses the question of the alternatives. According to Keynes break that bread makers window and create demand for glass. Never mind the bread maker could have used that money to re-invest in his own business. The faulty theory is meant to be masked by complex equations.
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Joe doesn't realize that pariah nation Saudi Arabia and the OPEC countries act in what's in their own best interest. Just think, leaders acting on self interest rather than on progressive ideology. He'll never understand it.
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