Lowering its oil production by 2 million barrels a day, OPEC is hitting at the Biden Administration and causing oil and gasoline prices to go back up before the Nov. 8 mid-term elections, energy industry analysts say.
Odessa oilman Kirk Edwards and spokesmen for the Texas Alliance of Energy Producers, the Texas Oil & Gas Association and the Independent Petroleum Association of America said the Saudi Arabia-dominated Organization of Petroleum Exporting Countries and its affiliate, OPEC-Plus, are being deliberately contemptuous of President Biden’s desire for them to increase production.
“OPEC is delivering a body blow back to the Biden administration’s manipulation of the Strategic Petroleum Reserve, so the administration’s ploy of flooding the market with one million barrels per day from the SPR in Louisiana in order to lower gasoline prices before the mid-term elections is going to backfire tremendously,” Edwards said.
“Not only are we draining the SPR to its lowest level since 1985, this is coming at a time when we are closer to war with Russia and China than ever before. Why our Republican colleagues in the House and Senate in Washington are not screaming about this each and every day is beyond me.
“The SPR is for our national security, not to make for cheap gasoline during an election season. Mexico does this before their presidential elections. Now the Biden administration is stooping to these low levels and they even admit it.”
Edwards said Biden has reduced the SPR from 640 million barrels to 460 million and will further decrease it to 400 million.
“OPEC is no dummy,” he said. “They’re willing to let the U.S. go ahead and empty the SPR now only to have to fill it up with their foreign oil and, I can promise you, at a much higher price down the road,” he said.
“This insanity has to end and this country needs an all-of-the-above approach to our energy independence and security. Together, we can do this. It just takes smart people to plan the proper path.”
OPEC made its announcement Oct. 5 and with West Texas Intermediate crude oil having risen from $79.49 per barrel Sept. 30 to $88.42 Thursday, Edwards predicted that the price of gasoline will go from $3 to $3.30 per gallon immediately in Odessa and to around $3.75 if oil goes back to $100 per barrel.
“That would be up 25 percent from $80,” he said. “Oil industry people would like the Biden administration to notice how important the U.S. energy industry is to this country and the world. “We produce the least expensive, cleanest energy and yet we battle this administration at every turn.”
Texas Alliance of Energy Producers President Jason Modglin said OPEC’ “is understandably self-centered.
“They are asserting themselves as the world’s swing producer in the face of the Federal Reserve purposefully slowing the economy to combat inflation and China constantly manipulating both oil demand and supply,” Modglin said from Austin. “The two million barrels are largely a symbolic cut with about half being actual cuts because many OPEC member countries are unable to produce at their allotment.
“Washington should respond by unleashing domestic producers from regulatory uncertainty and dropping these constant political attacks that serve no other purpose than to drive up food and fuel prices.”
TXOGA President Todd Staples said from Austin that OPEC’s announcement “is to address the global uncertainty surrounding demand and economic conditions.
“It further underscores that the best way to ensure Americans have access to clean, affordable, reliable energy is to encourage the increased production of homegrown, domestic energy that supports jobs, national security and economic growth while taking every step to protect the environment,” Staples said.
“The American oil and natural gas industry leads the world in investing in innovative, emissions-reducing technology. Relying on production elsewhere means forfeiting our energy security and the environmental standards we have here in the United States.”
Citing the Wall Street Journal, IPAA President-CEO Jeff Eshelman said the Biden administration has leased fewer federal acres for oil and natural gas drilling than any administration in its early stages since the end of World War II in 1945.
“The comment period for the new leasing plan is scheduled to close on Friday, months after the Obama administration plan expired, and it will likely be several more months before another off-shore sale can be held,” Eshelman said Wednesday from Washington, D.C.
“Worsening this ‘trickle,’ the Department of the Interior recently again missed the deadline for announcing on-shore lease sales in the third quarter, meaning there will likely not be another sale until at least the end of the year if not 2023.”
Eshelman also criticized Biden’s use of the SPR “as a political lever, ignoring its intended purpose.
“Heading into the hurricane season and winter months, the SPR is already at historic lows,” he said. “Yet in an attempt to clean up concern over the OPEC decision that will likely raise gasoline prices, notably ahead of the mid-term elections, the White House announced that it would continue to use the SPR as its own personal Band-Aid.
“At the president’s direction, the Department of Energy will deliver another 10 million barrels from the SPR to the market next month, continuing the historic releases that he ordered in March.”
