More alarm bells for Biden as OPEC threatens to cut oil production by 2 MILLION barrels a day

More alarm bells for Biden as OPEC threatens to cut oil output by 2 MILLION barrels a day (even after his MBS fist bump): White House rages over fears gas prices could rise even more with just five weeks to midterms

  • The White House is ‘cramping and panicking’ over the potential outcome of OPEC’s decision, an unnamed official told CNN
  • Biden aides took victory laps as gas prices fell at a record pace this summer
  • They have been relatively silent on the issue as they begin to creep back up

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American motorists could face another hike in gas prices as the OPEC+ alliance considers cutting oil production by up to two million barrels a day, which could be a major setback for the Biden administration.

Energy ministers from the OPEC cartel, whose leading member is Saudi Arabia, and allied non-members including Russia are meeting in person at the group’s headquarters in Vienna for the first time since early 2020 at the start of the COVID-19 pandemic.

They are discussing cutting production by up to two million barrels a day to help reverse falling prices.

It’s not yet clear what impact the change will have on the pumps, but the decision left the Biden administration scrambling to avoid a “total disaster,” according to a CNN report.

OPEC’s decision after their Wednesday meeting could force prices back up at the pump after the White House celebrated falling at a record pace this summer. They have already started to rise again in recent weeks.

But a sudden increase would be a particularly worrisome setback with November’s midterm elections just over a month away.

One official told CNN that the White House is ‘convulsing and panicking’ over the potential outcome.

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The White House is ‘cramping and panicking’ over OPEC’s expected decision to cut oil production, an unnamed official told CNN

Senior officials across economic and foreign policy have reportedly lobbied allies in the Middle East to vote against production cuts.

DailyMail.com has reached out to the White House National Security Council for comment.

Press Secretary Karine Jean-Pierre was pressed Tuesday about the White House’s earlier victory lap over falling gasoline prices, which has resulted in comparative silence as they creep back up.

‘You said the president was responsible for gas prices falling. Is the president responsible for gas prices going up?’ asked Fox News reporter Peter Doocy at Jean-Pierre’s regular press briefing.

She replied: ‘So, it’s a lot more nuanced than that.’

Jean-Pierre pointed out that gas prices have risen across the globe and chalked up the spikes to ‘ [COVID-19] pandemic and Putin’s war’ in Ukraine.

“We understand there’s more work to be done, we never said we’re done here,” the Biden official said.

“But we’ve seen, the reality is, we’ve seen the fastest drop in gas prices in over a decade. It’s because of what this president has done.’

A production cut could benefit Russia by establishing higher prices ahead of an EU ban on the majority of Russian oil imports, a sanction over the invasion of Ukraine, that comes into force at the end of the year, analysts at Commerzbank said.

Oil prices rose this summer as markets worried about the loss of Russian supplies from sanctions over the war in Ukraine, but slipped as fears of recessions in major economies and China’s COVID-19 restrictions weighed on crude demand.

It is unclear how much of an impact a production cut would have on oil prices – and thus gasoline prices – because members are already unable to meet the quotas set by OPEC+.

Still, Saudi Arabia may be reluctant to strain its relationship with Russia, even though the world’s biggest oil exporter had some reservations about cuts and has recently drawn leaders from Biden to German Chancellor Olaf Scholz to talk about energy supplies.

The Commerzbank analysts said a small trim would likely push oil prices further down, while the group would need to remove at least 500,000 barrels a day from the market to bolster prices.

Such a production cut ‘would undoubtedly signal to the market the cartel’s resolve and determination to support oil prices’, said UniCredit economist Edoardo Campanella. But the supply would fall less than announced.

‘If the group cuts target production by 1 million barrels per day, actual output is likely to fall by around 550,000 barrels per day – as countries like Russia or Nigeria that produce below the quota will see their formal targets fall but remain above what they can currently produce,” Campanella said.

At its last meeting in September, the group cut the amount of oil it produces by 100,000 barrels a day in October. This token cut did little to boost lower oil prices, but it signaled to markets that OPEC+ was willing to act if prices continued to fall.

Jacky

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