Yellin: OPEC cutting oil production bad for the world economy

[rogue06]

Source: Yellen Criticizes Oil Output Cut, Downplays Dollar Strength: FT

US Treasury Secretary Janet Yellen said the decision by Saudi Arabia and its OPEC+ allies to cut oil output was inappropriate and harms the global economy, reinforcing the Biden administration’s strong criticism of the move.


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[Sparko]

Yeah, isn't that our supposed green goal? To put OPEC out of business altogether and eliminate the need for fossil fuels?

I actually think OPEC is doing the exact wrong thing. By cutting oil production and raising prices, they are inadvertently encouraging people to find ways to be independent of them. What they should be doing is flooding the market with cheap oil so that people are content to drive their gas guzzlers and remain dependent on OPEC. Cheap OPEC oil would mean that it would be too expensive for the US to up our own oil production too. But right now, the more OPEC cuts back and the more expensive foreign oil gets, the more pressure is put on Biden to relax the reigns on domestic oil production and the more profitable domestic oil production becomes.

[rogue06]

Yeah, isn't that our supposed green goal? To put OPEC out of business altogether and eliminate the need for fossil fuels?

I actually think OPEC is doing the exact wrong thing. By cutting oil production and raising prices, they are inadvertently encouraging people to find ways to be independent of them. What they should be doing is flooding the market with cheap oil so that people are content to drive their gas guzzlers and remain dependent on OPEC. Cheap OPEC oil would mean that it would be too expensive for the US to up our own oil production too. But right now, the more OPEC cuts back and the more expensive foreign oil gets, the more pressure is put on Biden to relax the reigns on domestic oil production and the more profitable domestic oil production becomes.

Short of putting the proverbial gun to his head, I don't see old Joe changing on this. After all, this was supposed to be what makes him a historic president and not the literal placeholder that he was elected as.

[rogue06]

And as he goes around hat in hand and on bended knee begging the Saudis and countries that are openly hostile to us to produce more oil, it looks like he's about to cut production here in the U.S. even more

Source: America’s energy chaos is Biden’s fault. As we pay at the pump, will Democrats pay in midterms?

Biden's war on American energy has him begging foreign countries for oil instead of drilling here

Our nation is once again in a perpetual state of energy dependence. Twice now, the president of the United States has pleaded with the Organization of Petroleum Exporting Countries (OPEC) to come to the rescue of the American economy, and twice he has been snubbed. The most recent instance only confirms what everyone has known for nearly two years — the emperor has no clothes.

This week OPEC and its plus one Russia (OPEC+) announced they would curb production by 2 million barrels per day. This happened despite the Biden administration’s quid pro quo scheme to purchase OPEC barrels to refill the Strategic Petroleum Reserve (SPR) in exchange for a guarantee to not lower production. According to Goldman Sachs, we are likely to see oil prices return to $110 per barrel, and gasoline prices will likely return to $5-$6 a gallon nationally.

It’s understandable to see this announcement as a betrayal by OPEC, but the real betrayal is the Biden administration’s actions in weakening America’s energy independence and dominance. America should never be put in a position where our energy policy is dictated by foreign nations. Under our leadership in 2019, the U.S. achieved energy security when we became a net energy exporter for the first time in 67 years.

That all came to a grinding halt when the Biden administration took the reins of the American economy. Since day one, when American energy producers were struggling to come up for air from the devastation of the pandemic, the Biden administration tied cement blocks to their legs by canceling the Keystone XL pipeline, layering regulatory red tape, and empowering excessive litigation aimed at killing new energy infrastructure development — and he did it all while pointing the finger at American companies and accusing them of price-gouging and war profiteering.

American energy producers used to be the world’s largest swing producers — a mighty force able to counteract the price-fixing measures of foreign cartels like OPEC+. Today, however, the Biden administration prefers to fight fire with surrender.

Rather than correct his many mistakes in regulating American energy to the brink of extinction, the administration has fecklessly deployed its own price-fixing tools, flooding the market with America’s strategic oil reserves. And if 260 million barrels wasn’t enough, the Biden administration is now set to release another 10 million barrels next month — an announcement just in time for the U.S. midterm elections.

And where are we today? Although down from their summer peak, the price at the pump is still $1.49 higher than when Biden took office. That’s a 62% spike over what was on his first day. In fact, gasoline prices currently sit at nearly the same level as the period immediately before Putin invaded Ukraine. The inescapable logic is that global geopolitical turmoil is not the only reason for high prices. Biden’s strategy of foreign dependence is making America extremely vulnerable and threatening to drive the American economy off the cliff.

And high prices are not the only source of vulnerability for America. The SPR is at a near 40-year low, having been drained by the Biden administration by 34 percent. Moreover, this number doesn’t account for the total promised to be released by the administration. When all is said and done, the SPR will be at its lowest levels since 1983 — a total depletion of 42.5 percent.

Moreover, America’s stockpiles of transportation fuels like gasoline, diesel, jet fuel, and, of course, critical heating oils are also at record seasonal lows not seen since 1996. This doesn’t bode well for a nation that has lost over 1 million barrels of refining capacity under the Biden administration.

Before we deflect blame toward OPEC, we should get our house in order. Consider that, according to the economists Stephen Moore and Casey B. Mulligan, had the Biden administration not repealed the Trump administration’s pro-growth policies, America would be producing around 2 to 3 million barrels more than we currently are, and U.S. GDP would be increased by $100 billion per year. Those are precious barrels and revenue Americans can’t afford to leave off the table.

Unfortunately, the build-nothing Biden administration has never thought to look to American energy. Instead, they run to foreign governments for energy, like Venezuela. The irony is that Venezuela itself is an OPEC member. At the same time, the administration is considering a ban on energy exports — a move that would slash American GDP by $44 billion and kill 85,000 American jobs in 2023. But don’t worry, that’s all part of the green plan — it’s certainly difficult to assume otherwise.

If that wasn’t enough, some Democratic members of Congress are proposing to remove U.S. troops stationed in Saudi Arabia and prohibit future defense assistance to a strategic ally. What the Biden administration and the congressional left forget is that Saudi Arabia is not our gas station; we have our own resources under our feet.

I can only imagine how difficult it will be for the Biden administration and Democrats to defend its ineptitude and track record of policymaking as we approach midterms in November.



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Not only did old Joe attack the oil industry -- moments before begging for their help as well -- he also accused Mom and Pop convenience stores of price gouging when in fact they often make no profit on gas, hoping to use it as loss leader to get people to stop and also pick up an over-priced drink and munchies.

On a final note, basically when we tell OPEC to produce more oil we are asking them to cause their countries to suffer in order that we won't. And yet folks act surprise when they don't see this as a good idea.

[Sparko]

Short of putting the proverbial gun to his head, I don't see old Joe changing on this. After all, this was supposed to be what makes him a historic president and not the literal placeholder that he was elected as.

Well after November, hopefully he won't be the one deciding if Republicans take the house.

[rogue06]

Well after November, hopefully he won't be the one deciding if Republicans take the house.

Personally, I think that the leaks that Hunter may finally be facing being indicted are designed to put pressure on him not to run.

Do what you're told and the MSM and Democrats will continue to run interference for you (I don't know if ABC or PBS ever even mentioned it, and if he wants such stories to continue to be spiked he better be a good little codger). It's stuff like that which allows Peppermint Patty (Psaki) to go on NBC's Meet the Press this past Sunday and declare its not a story or else it would be on the front page.

[seanD]

Source: Yellen Criticizes Oil Output Cut, Downplays Dollar Strength: FT

US Treasury Secretary Janet Yellen said the decision by Saudi Arabia and its OPEC+ allies to cut oil output was inappropriate and harms the global economy, reinforcing the Biden administration’s strong criticism of the move.


Source

© Copyright Original Source

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The fact that they're doing one thing domestically, yet saying things that are completely different to what they're doing domestically, regardless of the explanation one wants to come up with for that, should be pretty alarming.

[Ronson]

Yeah, isn't that our supposed green goal? To put OPEC out of business altogether and eliminate the need for fossil fuels?

I actually think OPEC is doing the exact wrong thing. By cutting oil production and raising prices, they are inadvertently encouraging people to find ways to be independent of them. What they should be doing is flooding the market with cheap oil so that people are content to drive their gas guzzlers and remain dependent on OPEC. Cheap OPEC oil would mean that it would be too expensive for the US to up our own oil production too. But right now, the more OPEC cuts back and the more expensive foreign oil gets, the more pressure is put on Biden to relax the reigns on domestic oil production and the more profitable domestic oil production becomes.

Agree completely. The last thing they should want to do is give more argument to the greenies to get off of oil. Plus, OPEC learned long ago that rising oil prices hurts their profits, and they are aiding this right now.

My only guess is that OPEC (and the Saudis particularly) want to hurt Biden and chase him out of office, and especially hurt the midterm elections. They're willing to lose some profitability to achieve this, like when they flooded the market to chase off US shale production.

[seanD]

Agree completely. The last thing they should want to do is give more argument to the greenies to get off of oil. Plus, OPEC learned long ago that rising oil prices hurts their profits, and they are aiding this right now.

My only guess is that OPEC (and the Saudis particularly) want to hurt Biden and chase him out of office, and especially hurt the midterm elections. They're willing to lose some profitability to achieve this, like when they flooded the market to chase off US shale production.

That actually sounds quite plausible as to the motives of OPEC.

But I still haven't figured out if the climate change cultists in Biden's cabinet (who I believe are the ones running things) wanted this to happen or not, as it does in fact serve their purpose. It's a very perplexing administration, full of unpredictable and contradictory actions, thus it's very hard to parse what's going on.

[rogue06]

That actually sounds quite plausible as to the motives of OPEC.

But I still haven't figured out if the climate change cultists in Biden's cabinet (who I believe are the ones running things) wanted this to happen or not, as it does in fact serve their purpose. It's a very perplexing administration, full of unpredictable and contradictory actions, thus it's very hard to parse what's going on.

C'monman! Here's the deal. We finally got the "professionals" back in charge. These are the "adults" in charge who know what they're doing unlike anyone in the previous Administration. I mean, can't you tell by all the great things they've accomplished? All the things that they've done to for the country.

[seanD]

C'monman! Here's the deal. We finally got the "professionals" back in charge. These are the "adults" in charge who know what they're doing unlike anyone in the previous Administration. I mean, can't you tell by all the great things they've accomplished? All the things that they've done to for the country.

One thing Trump for sure was consistent about was his hostility to the climate change cult and their "green" agenda. So the Biden voters definitely got what they elected.

[Mountain Man]

One thing Trump for sure was consistent about was his hostility to the climate change cult and their "green" agenda. So the Biden voters definitely got what they elected.

Endless chaos?

[seanD]

Endless chaos?

It's hard to say what their intent is, especially considering they have a braindead potus behind the wheel.

Are they intentionally trying to create economic chaos -- a type of order out of chaos situation (i.e. we engineer the chaos and then engineer the solution) -- or are they like blind devotees to a cult and think their actions are for the greater good, consequences be damned? The former seems a bit too conspiratorial and requires them to be more competent than I believe they are.

OTOH, things like the border crisis they've created (both here and in the EU) definitely looks like they're intentionally trying to create economic and societal chaos. The things that the Soros funded DAs are doing also looks intentional. DoJ targeting conservatives we know is intetional.

[Teallaura]

Okay, OPEC can't just endlessly flood the market. The Saudi's sure can't - they are getting to the end of their run.

The timing is probably to stick it to Biden. That isn't the purpose, though.

It's more likely to prevent the price cap by making Russian oil more profitable if a cap is initiated because Russian oil would still be cheaper and the cap would have to be above production cost to even stand a chance of working. Or something even more convoluted but if the Saudis can help China get its Russian vassal, that might get Saudi Arabia a partner for when they run out of oil.

In the meantime, it hurts both India and China. So when this fails, the Saudis can claim they were just helping. Not that anyone would believe them.

I wonder if driving up prices helps soak up some of the risk in helping Russia skirt sanctions?

FYI, this might just be short term. The decrease matches Saudi Arabia's projected increase - so they may not cut production at all. I'm leaning toward this as it messes with the US minus all the nastier consequences.


Biden becomes a lame duck in January. There aren't enough Democrat Senate seats up for grabs to give the Republicans the votes to overturn vetoes but they will be able to block everything the Dems try. It depends on how bad the bloodbath is as to whether some Democrat Senators switch parties - I expect there may be a couple. We'll see. Either way, Biden can't do more damage. There's a slim chance the Republicans can clean up some of the mess before 202 4 but that's hard while Biden still has a veto.

[Starlight]

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US domestic oil production when Biden took office in Jan 2021 was 11.1 million barrels per day... it's now 11.8 million barrels per day. Repeat a few times: US Oil production has increased under Biden.

During the Trump administration the average yearly increase in domestic oil production was: 0.5 million barrels per day
During the Biden administration the average yearly increase in domestic oil production is: 0.5 million barrels per day

The US is still energy independent and a net energy exporter. The US is the world's largest producer of oil.

But I've learned from experience that telling you this won't matter because your minds are actually broken and no matter how many times you're corrected you'll just repeat the falsehoods. I'm starting to think right-wingers just have mental illness on this topic. Whatever facts you're shown you'll just return to claiming Biden hAs CriPpLeD tHe dOmEsTiC OiL inDustRy bEcaUsE GrEeN NeW DeAL oR SoMe oThEr LaW tHaT NeVeR pASseD!!!

A big problem is that because the oil is in the US produced by private companies, they are choosing to sell it internationally rather than domestically, for more profit, because of capitalism and the free market. One of the things Biden has been looking at is requiring them to sell domestically, which would force down the prices in the US. But the for-profit oil companies aren't big fans of that and are lobbying against it.