OPEC will cut production by 2 million barrels a day, likely sending gas and oil prices back up
NBCNov 25, 2022
The Facts
On Wednesday, OPEC+, the group of major oil producers that includes Saudi Arabia and Russia, announced after its first in-person meeting since March 2020 that it will cut oil production by 2M barrels per day starting in November. OPEC and its partners control more than 40% of the world’s oil production, and this reduction is the equivalent of about 2% of global oil demand.
While announcing its cuts, OPEC+ said the move was in response to “the uncertainty that surrounds the global economic and oil market outlooks.” The price of Brent crude went up 1.5% to $93 after the news.
The Spin
Republican narrative
Pres. Biden has given Americans yet another reason to vote Democrats out in this fall’s elections, and make sure they get nowhere near the White House in 2024. Instead of ramping up domestic oil and gas production, Biden remains beholden to climate zealots that think we can survive on renewable energy. This has the making of a looming energy mess.
Democratic narrative
There’s no reason to panic. The slowing demand from the EU and China, which OPEC+ fears, might counter the cutbacks. OPEC+ also faces stiff competition from increased production from the US, Guyana, and Brazil. OPEC+ countries might find that their decision won’t have the desired result, and Biden's energy policies are on track.
