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CNN Business and Newsweek: Saudi’s cut oil supply to US, Biden restricts drilling. Gas prices rise.

  |   By Polling+ Staff

Representatives of OPEC member countries attend a press conference after the 45th Joint Ministerial Monitoring Committee and the 33rd OPEC and non-OPEC Ministerial Meeting in Vienna, Austria, on October 5, 2022. - The OPEC+ oil cartel meets for the first time face-to-face since Covid curbs were introduced in 2020. (Photo by VLADIMIR SIMICEK / AFP) (Photo by VLADIMIR SIMICEK/AFP via Getty Images)



Here’s but one headline on this subject, this one at CNN: https://www.cnn.com/2023/06/06/business/us-government-gas-forecast-increase-opec-saudi-arabia/index.html

US government ramps up its gas price forecast. Blame OPEC and Saudi Arabia

CNN Business reports:

“CNN  — Forecasters at the US Energy Department on Tuesday ramped up their forecasts for American oil and gasoline prices next year, citing new steps by Saudi Arabia and OPEC+ to restrain the supply of oil.

The US Energy Information Administration dimmed its estimate of global oil production through 2024 because of Saudi Arabia’s decision to slash oil production and an agreement by OPEC+ to extend its output cuts.

Citing those supply cuts, the EIA said it expects “some upward pressure” on oil prices, “notably in late-2023 and early-2024.”

The near-term impact will be modest, according to the analysis, with the forecast for US and Brent oil prices rising by around 2% for the rest of the year, compared with the May forecast. For gasoline, the EIA now sees retail prices averaging $3.41 a gallon during the third quarter, up by just 2.7% from the May forecast.

But the bigger impact will be felt in 2024. The EIA boosted its forecast for US oil prices by 11.4% for the second quarter of next year and 14.5% for the third quarter. Oil prices are now expected to average $80 a barrel in the fourth quarter of next year, a 19.4% increase from the EIA’s prior forecast.

This will drive up prices for consumers, relative to where they would have been before OPEC’s latest moves.”

Well no kidding.

Recall this story from The Washington Post the other day: https://www.msn.com/en-us/money/markets/biden-approves-new-offshore-oil-leases-faces-hits-by-both-sides/ar-AA1hrqYW

“The Biden administration said Friday it will approve just three offshore oil and gas lease sales through 2029 — the smallest offshore oil drilling plan in history and one designed to narrowly comply with limits set by a divided Congress.

The decision reflects how Biden is grappling with the realities of divided government and his own climate agenda, including his 2020 campaign pledge to end new offshore oil projects. In a heavily negotiated landmark climate bill last year, Congress tied the fate of offshore wind development — a Biden priority — to approval of new oil leases.   With its announcement Friday, the administration argued it was meeting its legal mandates while still furthering the transition away from fossil fuels.

In a statement, Secretary of the Interior Deb Haaland said the plan represents “the smallest number of oil and gas lease sales in history.” She added that it sets a course “to support the growing offshore wind industry and protect against the potential for environmental damage and adverse impacts to coastal communities.”

The plan will delay any new oil lease sales until 2025, leaving as much as a two-year gap between sales that historically have been scheduled for several times a year. The Interior Department will also lease only in the Gulf of Mexico — dismissing proposed sales for Alaska’s Cook Inlet — as the administration seeks to limit fossil fuel production and zero out U.S. greenhouse gas emissions by 2050, according to an announcement from the Interior Department.”

So in other words? Succeeding in cutting the US oil supply, it makes headlines that with the Saudis doing the same to the US – the price of gas goes up.

As noted recently here in Newsweek. https://www.msn.com/en-us/money/markets/gas-prices-rise-to-7-at-california-stations/ar-AA1hhFZd#image=1

Gas Prices Rise to $7 at California Stations

In other words? This would be called cause and effect.