OPEC+ is cutting oil production by 2 million barrels per day. Here's what that could mean for U.S. gas prices.
OPEC+ is jolting oil markets this week with plans to cut output — and the ripples could reach all the way to the U.S. midterm electionsThe coalition of OPEC, Russia and allied producers on Wednesday announced cuts of 2 million barrels per day in Vienna starting in November 2022.
It's looking to prop up prices that have fallen greatly since early June when Brent crude was above $120 per barrel — and has already succeeded despite bearish economic signs.this week, with Brent crude rising several dollars to roughly $93 Wednesday morning.The crude revival — if it persists — will put fresh upward pressure on U.S.
"At a time when maintaining a global supply of energy is of paramount importance, this decision will have the most negative impact on lower- and middle-income countries that are already reeling from elevated energy prices," they added.Rice University's Jim Krane tells Axios the likely cuts reflect the persistence of Saudi-Russia market cooperation that began a half-decade ago in response to the rise of U.S. shale production.
"Putin has been able to insert himself in what was a pretty strong relationship between the U.S. and Saudi Arabia, and he's destabilizing that relationship right now," said Krane, a fellow with the school's Baker Institute for Public Policy.The White House had been aggressively touting the pump price relief for weeks, but a reversal could revive political jeopardy in the upcoming election.
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