Will gas prices rise in West Virginia and Ohio after Saudi Arabia cuts oil supplies?

FRANKFURT, Germany (AP) – Saudi Arabia will cut the amount of oil it sends to the world economy and take unilateral steps to support falling oil prices. Last 2 cuts in supply Oil price hikes by major producers in the OPEC+ alliance have failed.

Saudi Arabia’s 1 million barrels per day cut starting in July comes after other OPEC+ producers agreed at a meeting in Vienna. extend early production cuts Until next year.

Saudi Arabia’s Energy Minister Abdulaziz bin Salman called the cuts “lollipops” and said at a press conference, “We wanted the cake to be chilled.” He said the cuts could be extended and the group would “do whatever it takes to bring stability to this market.”

Jorge Leon, senior vice president of oil market research at Rystad Energy, said the new cuts are likely to push oil prices higher in the short term, but the aftermath will depend on whether Saudi Arabia decides to extend the cuts. said it depends on

He said the measure “provides a price floor as Saudi Arabia can carry out voluntary cuts as much as it pleases.”

Falling crude oil prices provided a tailwind US drivers can refuel cheaper And it brought some relief from inflation to consumers around the world.

“Gasoline won’t be cheap,” Leon says. “If anything, it will be slightly more expensive.”

What Saudi Arabia feels needs more cuts is: Demand outlook uncertain As fuel for the next few months. China’s recovery from COVID-19 restrictions has not been as robust as many had expected, while the U.S. and Europe feared an economic slowdown.

Saudi Arabia, a major producer of the OPEC oil cartel, Surprise production cut of 1.6 million barrels per day in April. The kingdom’s share was 500,000. This follows OPEC+’s October announcement that: 2 million barrel reduction per day Infuriating US President Joe Biden He threatened gas prices a month before the midterm elections.

Overall, OPEC+ is now reducing paper output by 4.6 million barrels per day. However, some countries cannot produce their quotas, so the actual reduction is about 3.5 million barrels per day, or more than 3% of global supply.

Previous production cuts have done little to sustainably push up oil prices. Brent crude, the international benchmark, climbed to $87 per barrel, but gave up on rising after the price cuts and has hovered below $75 per barrel for the past few days. US oil prices recently fell below $70.

it was helpful US drivers kick off summer travel seasonThe average price at the pump is $3.55, down $1.02 from a year ago, according to Auto Club AAA.Falling energy prices also fueled inflation in 20 European countries that use the euro drop to the lowest level Even before Russia invaded Ukraine.

Saudi Arabia needs Sustained high oil income Fund ambitious development projects aimed at diversifying the country’s economy.

The International Monetary Fund estimates that the kingdom will need $80.90 per barrel to meet its planned spending pledge, including a planned $500 billion future called Neom. A desert city project is also included.

The United States recently replenished its resources strategic oil reserves — after Biden announced, Largest release from a national reserve Last year was an indicator in U.S. history that U.S. officials may not be as worried about OPEC output cuts as they have been in recent months.

Oil-producing countries like Saudi Arabia need revenue to cover their national budgets, but they also need to consider the impact of high oil prices on oil-consuming countries.

Too high oil prices could accelerate inflation, rob consumers of purchasing power, and put pressure on central banks. US Federal Reserve ready for further interest rate hikes It could slow down economic growth.

Cuts in Saudi Arabia’s production and higher oil prices could further increase profits to fund Russia’s war on Ukraine.Russia found New oil customers in India and China And Turkey is in the midst of Western sanctions aimed at limiting Moscow’s vital energy revenues.

But there is a risk that rising oil prices will complicate trade by the world’s third-largest oil producer. $60 per barrel price cap imposed by the Group of Seven Major Democracies.

Russia found a way Avoid price caps Tankers do this through “dark fleet” tankers that falsify location data or transfer oil from ship to ship to disguise its origin. But these efforts come at a cost.

Russian Deputy Prime Minister Alexander Novak said the Russian government will extend the OPEC+ agreement based on the OPEC+ agreement. Voluntary reduction of 500,000 barrels per day Until next year, according to Russian state news agency TASS.

But Russia may not be keeping its promises.Moscow’s total oil exports and Refined products such as diesel fuel Oil volumes rose to a post-invasion high of 8.3 million barrels a day in April, the International Energy Agency said in its April oil market report.