The White House on Wednesday answered on the historical OPEC+ oil reduction, on the President Joe Biden said he was disappointed by the coalition’s short-sighted decision to cut production quotas in the current uncertain macro and geopolitical environment.
The White House also said the Department of Energy will deliver an additional 10 million barrels of oil from the Strategic Petroleum Reserve (SPR) and will continue to do so under Biden’s direction to promote energy security in the US
What happened: The OPEC+ coalition announced a reduction of 2 million barrels per day in Wednesday’s oil issue.
That reduction could reverse weeks of declining oil and gas prices, despite US pressure on the coalition to keep current quotas, according to Reuters. The quota withdrawal comes just two weeks before the midterm elections and threatened to push gas prices back to summer levels.
The reduction in OPEC+ oil underscored two important points: the US remains far too dependent on foreign energy, and the benefits of Biden’s “Inflation Reduction Act,” which boosted clean energy production and transitioned America to clean energy, are yet to come.
Continue reading: Exxon Mobil is a buy with signs of strong third-quarter earnings, says Bank of America
Why it matters: The sharp fall in OPEC+ production came amid an even sharper contraction in energy markets – which had an historic run in the first half of 2022 – amid rising fears that a global recession will weigh on energy demand.
Some saw this as OPEC’s way of controlling the price of energy.
In response, the White House said it would consult with Congress on additional tools and agencies to reduce OPEC’s control over energy prices.
Since the end of June, Brent crude is down about 20%. Following the Russian invasion of Ukraine in March, the international benchmark peaked at $139 a barrel.
More than 40% of world oil production is controlled by OPEC and its allies, which fuels demand for…
