Quote
OPEC and its allied producers on Monday agreed to reduce oil production by 100,000 barrels per day amid concern regarding falling oil prices and lingering fears of a global recession.
Why it matters: The move reverses the group's decision last month to boost oil production for the month of September by 100,000 barrels per day.
The big picture: This is the group's first cut in oil production in more than a year and comes as crude oil prices have fallen 25% in the past three months, the Wall Street Journal reported.
What they're saying: "The President has been clear that energy supply should meet demand to support economic growth and lower prices for American consumers and consumers around the world," White House press secretary Karine Jean-Pierre said in a statement.
What's next: The group noted in the press release that it has plans to reconvene on Oct. 5, and could meet again in the meantime if necessary to "address market developments."
https://www.axios.com/2022/09/05/opec-cut-oil-production
Why it matters: The move reverses the group's decision last month to boost oil production for the month of September by 100,000 barrels per day.
- OPEC said in a press release Monday that, alongside its allies, it had agreed to "revert to the production level of August 2022...for the month of October."
The big picture: This is the group's first cut in oil production in more than a year and comes as crude oil prices have fallen 25% in the past three months, the Wall Street Journal reported.
- Saudi Arabia's energy minister warned last month that OPEC+ countries could cut oil production at any time, AP reported.
- Members of the group are concerned that a successful revival of the 2015 Iran deal could see an influx of Iranian oil hit the market, though tensions between the U.S. and Iran have spiked in recent days, with the U.S. conducting a military flyover of the Middle East over the weekend.
- Members are also concerned that a global recession, egged on by sky-high inflation, energy woes in Europe and economic slowdown in China spurred by the COVID-19 pandemic, could weaken oil demand, per the Journal.
What they're saying: "The President has been clear that energy supply should meet demand to support economic growth and lower prices for American consumers and consumers around the world," White House press secretary Karine Jean-Pierre said in a statement.
- "U.S. oil production is up by more than half a million barrels per day since the beginning of the year and is on track to be up by more than one million barrels per day by the end of the year, on the way to a new production record next year," Jean-Pierre added.
What's next: The group noted in the press release that it has plans to reconvene on Oct. 5, and could meet again in the meantime if necessary to "address market developments."
https://www.axios.com/2022/09/05/opec-cut-oil-production
....
Do people prefer for oil production to rise or fall?
If oil prices rise, could we see a frenzy of activity spurred on by a search for alternatives to oil? Could it be similar to the natural gas crisis in europe where many are currently scrambling for firewood and other retro residential heating options? I wonder if there are good investment opportunities which lie along that line of thought.
As far as peak oil goes, there have been many who claimed modern day society could not function without crude oil. They say that oil is too central in too many modern inventions and innovations for us to survive without it. Oil is used to make plastics, fuel, lubricant. There is a long list of items and goods we depend upon as daily necessities that are produced from an oil base. Some of which would be difficult to replace were oil ever to be priced outside of our budgets.
Many modern innovations of recent times were trends intended to reduce our reliance on oil. Nations sought to achieve energy independence rather than rely on middle eastern or russian oil as sole providers. Our series of technology trends and counter trends have remained cyclical for a long time. And we still do not have a clear answer to our riddle of whether modern society could survive without oil to fuel it.
I'm actually very surprised that we haven't seen venture funding thrown at stirling engines, gravity batteries, thorium based nuclear reactors, fusion energy and our usual suspects of alt energy start ups. Is it possible that credit and liquidity have dried up to such an extent that people are no longer throwing random cash at start ups. The silence here is deafening.