barnswallow
Well-Known Member
OPEC and Russia won't expand oil output faster, in a rebuff to President Biden [NYTimes; 11.4.21]
So, of course, my first thought was that it's in the interests of Saudi Arabia and Russia to impose damage on Biden, since they're no longer riding the trump gravy train and likely wish to revisit that situation. But, the writer of the article doesn't go anywhere near that assumption and lays the situation out purely as an economic decision. And, obviously, there's an effect of rising demand as some of the covid effect lessens.
I'm putting this here in 'political hodgepodge' but it could just as well go into the Biden administration thread because voters vote with their pocket books and Biden will likely take a political hit for rising gas prices, no matter the reason.
And, then there's an effect of the world's attempt to move away from dependence on oil.
So, of course, my first thought was that it's in the interests of Saudi Arabia and Russia to impose damage on Biden, since they're no longer riding the trump gravy train and likely wish to revisit that situation. But, the writer of the article doesn't go anywhere near that assumption and lays the situation out purely as an economic decision. And, obviously, there's an effect of rising demand as some of the covid effect lessens.
I'm putting this here in 'political hodgepodge' but it could just as well go into the Biden administration thread because voters vote with their pocket books and Biden will likely take a political hit for rising gas prices, no matter the reason.
...President Biden and other world leaders have called on countries like Saudi Arabia and the United Arab Emirates to increase production because oil prices, which collapsed during last year’s pandemic lockdowns, have now reached their highest levels in seven years. Gasoline prices, too, have jumped in the United States, Britain and elsewhere.
The jump in prices, Mr. Biden said Tuesday, “is a consequence of, thus far, the refusal of Russia or the OPEC nations to pump more oil.”
...Prince Abdulaziz bin Salman, the Saudi oil minister who led the meeting, displayed a chart showing that since the beginning of March the prices of natural gas in Europe have roughly quintupled while Brent crude oil, the international benchmark, is only up by around a third.
“Oil is not the problem,” he said.
Hmm... I wonder why that is?Mr. Bahree noted that although Saudi Arabia had returned its oil production to pre-pandemic levels, the output of the United States, the world’s largest oil producer, is still well below what it was before the virus hit.
And, then there's an effect of the world's attempt to move away from dependence on oil.
...From the perspective of the big producers, Mr. Biden and other leaders are asking them to provide more oil so as to smooth the shift to a world where they may be out of business. There is probably “growing frustration” among the oil producers in OPEC Plus “at being asked to supply more barrels by Western leaders who are also calling for a rapid transition to renewables and an end to the age of oil,” Helima Croft, head of commodities research at RBC Capital Markets, an investment bank, wrote in a note to clients.
...With climate pressures looming, the OPEC countries may prefer to reap higher revenue, build their financial reserves and raise funds for investments in solar and wind power and other businesses that may eventually replace oil.
OPEC and its allies may also have less room to increase production than is believed. The group is falling short of its overall target, and some members, like Angola and Nigeria, are thought to have already reached their maximum outputs, while others, like Russia, may not be far away. It is not in the interest of countries unable to increase output for the Saudis and others to increase production, bringing down prices and revenue.
In the coming months, demand for oil, still the world’s largest source of energy, appears likely to grow further, as the global economy continues to recover, according to forecasters. Supply, however, may not keep pace, partly because oil companies and investors are wary of investing in what may be a dying business.
The result could be a bumpy transition.