White House has called on OPEC+ to increase oil production as gasoline prices rise and the economy revives.
August 13, 2021, | AtoZ Markets-Biden’s administration has said that OPEC+’s decision to gradually ease production cuts is “simply not enough” during a “critical time in the global recovery”.
In the United States, the national average for a gallon of gasoline currently stands at $3.186, about $1 more than last year. At this time, concerns about domestic inflation have prompted President Biden to make this call to OPEC+.
The Organization of Petroleum Exporting Countries (OPEC) and its non-OPEC allies, reached to phase out 5.8 million barrels per day of oil production cuts by September 2022.
What did the White House say?
“We are engaging with relevant OPEC+ members on the importance of competitive markets in setting prices,” National Security Advisor Jake Sullivan said in the statement obtained by CNBC.
“Competitive energy markets will ensure reliable and stable energy supplies, and OPEC+ must do more to support the recovery.”
Officials from the Biden administration spoke with representatives of OPEC in Saudi Arabia this week, as well as representatives of the United Arab Emirates and other members of OPEC + to try to achieve some change.
Gasoline Prices Are Soaring
Gasoline prices in the U.S. have risen this year as demand for petroleum products returns. The national average for a gallon of gasoline stood at $ 3,186 from $ 3,143 a month ago.
Also, during the last year, prices have risen a little more than $ 1. Likewise, during May, the national average crossed the $ 3 mark for the first time since 2014.
How Are Oil Prices?
Oil prices have suffered the impact of doubts about the economic recovery due to the delta variant of Covid-19.
Currently, the price is in a small channel between $70.80 and $71.40, so we must keep an eye on these areas in case of a breakout in the short term.
What Will the Demand for Oil Be Like?
OPEC expects demand to ignore the latest setback caused by the pandemic. In contrast, the International Energy Agency (IEA) cut its outlook.
Also, the US government kept its growth forecast stable for 2021, but cut it for 2022.
Oil demand will increase by 5.95 million barrels per day (bpd). This year, 6.6%, unchanged from last month’s forecast, according to the OPEC report.
Meanwhile, fuel use will increase by 3.28 million bpd by 2022, OPEC said, also unchanged.
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