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The White House on Tuesday promised to work with all crude oil producers and others to ensure lower prices for the American people as the OPEC+ group surprised markets with a 1.6 million barrel-per-day production cut.
“We’ll continue to work with all producers and consumers to ensure energy markets, support economic growth and lower prices for the American producers,” Jean-Pierre said in a reiteration of the Administration’s stance.
The price of WTI has shot up to $80 per barrel, a more than $7 per barrel increase over last week’s prices as OPEC+ shocked the market with a sizable voluntary cut from some of its members that will start in May and run through the end of the year.
The move has prompted some analysts to predict a hastening of $100 oil with the supply curbs, but President Joe Biden said on Monday that “it’s not going to be as bad as you think.”
Meanwhile, other analysts are predicting lower prices, interpreting OPEC’s production cuts as a sign that the group sees demand weakness ahead.
When asked about the Administration’s response to OPEC’s move to cut production, Jean-Pierre touted the Administration’s policies that helped to bring down oil and gasoline prices last year when WTI traded briefly above $120 per barrel in June, even when analysts were predicting higher prices. Gasoline prices, Jean-Pierre said, have fallen $1.50 per gallon.
Reporters asked Press Secretary Jean-Pierre to clarify what the President had meant when he said it wasn’t going to be as bad as we think, and why it wouldn’t be that bad.
“Analysts were wrong a year ago. We have the data to prove that.”
Jean-Pierre refused to get into the hypothetical about what this summer will bring as relates to gasoline prices.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.
Furthermore, analysts who interpreted OPEC+’s latest cut as a sign that the group sees demand weakness ahead are absolutely wrong. How could OPEC+ see demand weakness when it is projecting a rise in global oil demand in 2023 of 2.3 million barrels a day (mbd) supported by China’s economy which is projected to grow by 5.2%-6.5% this year?
OPEC+’s cut was a pre-emptive measure against lingering fears in the market that the Silicon Valley Bank collapse could still develop into a full-blown global banking or financial crisis reminiscent of the 2008 crisis.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert