Page 12 - aruba-today-20220906

A12 BUSINESS
Tuesday 6 sepTember 2022
OPEC+ makes small trim to world oil

supplies as prices fall

By DAVID McHUGH
AP Business Writer
FRANKFURT, Germany (AP)
— OPEC and allied oil-pro-
ducing countries, including
Russia, made a small trim in
their supplies to the global
economy Monday, under-
lining their unhappiness as
recession fears help drive
down crude prices — along
with the cost of gasoline, to
drivers' delight.
The decision for October
rolls back a mostly symbolic
increase of 100,000 bar-
rels per day in September. The sun sets behind an idle pump jack near Karnes City, USA,
It follows a statement last April 8, 2020. Associated Press
month from Saudi Arabia's
energy minister that the of Russian oil because of there because European
OPEC+ coalition could re- sanctions over its invasion sanctions aimed at block-
duce output at any time. of Ukraine pushed them up. ing most Russian oil imports
Oil producers such as Saudi Recently, recession fears won't take effect until the
Arabia have resisted calls have taken the upper end of the year.
from U.S. President Joe hand. Economists in Europe Other factors are lurking
Biden to pump more oil to are penciling in a reces- that could influence the
lower gasoline prices and sion at the end of this year price of oil. For one, the
the burden on consumers. due to skyrocketing infla- Group of Seven wealthy
OPEC+ has stuck with only tion fed by energy costs, democracies plan to im-
cautious increases to make while China's severe restric- pose a price cap on Rus-
up for deep cuts made tions aimed at halting the sian oil aimed at battling
during the COVID-19 pan- spread of the coronavirus high energy prices and re-
demic, which were finally have sapped growth in ducing oil profits that Rus-
restored in August. that major world economy. sia can use for its war in
Since then, growing worries Those falling oil prices have Ukraine.
about slumping future de- been a boon to U.S. driv- That's if the cap works as in-
mand have helped send ers, sending gasoline prices tended. Russia could refuse
oil prices down from June down to $3.82 per gallon to supply oil to countries
peaks of over $120 per bar- from record highs of over and companies observing
rel, cutting into the windfall $5 in June and offering a the cap, which would take
for OPEC+ countries' coffers potential boost to Biden as barrels off the market. The
but proving a blessing for his Democratic Party heads price cap has not been
drivers in the U.S. as pump into midterm elections. set, and its influence on the
prices have eased. "The President has been global price remains un-
The supply cut for October clear that energy supply clear.
is only a small fraction of should meet demand to Meanwhile, a deal be-
the 43.8 million barrels per support economic growth tween Western countries
day under OPEC+ produc- and lower prices for Ameri- and Iran to limit Tehran's
tion goals, but wrong-foot- can consumers and con- nuclear program could
ed several analysts' predic- sumers around the world," ease sanctions and see
tions of no change in out- White House press sec- more than 1 million barrels
put. Oil prices jumped after retary Karine Jean-Pierre per day of Iranian oil return
the announcement. said. "President Biden is to the market in coming
U.S. crude rose 3.3%, to determined to continue to months. However, tensions
$89.79 per barrel, while in- take every step necessary between the U.S. and Iran
ternational benchmark to shore up energy supplies appear to have risen in re-
Brent was up 3.7%, to and lower energy prices." cent days: Iran seized two
$96.50, after the decision. In June, fears that U.S. and U.S. naval drones in the Red
The amount of oil per day European sanctions would Sea, and U.S., Kuwaiti and
"may seem negligible, but take Russian oil off the mar- Saudi warplanes flew over
the message from today's ket helped push Brent to the Middle East on Sunday
cut is clear: OPEC+ thinks over $123. Prices have fall- in a show of force.
they've fallen enough," Co- en sharply in recent weeks OPEC+ countries' energy
lumbia University energy as it became clear that ministers said their Septem-
policy expert Jason Bordoff Russia is still managing to ber increase of 100,000
tweeted. sell significant amounts of barrels a day was only for
Oil prices have gyrated in oil in Asia, albeit at sharply that month and that the
recent months: Recession discounted prices. group could meet again at
fears have pushed them But concerns about the loss any time to address market
down, while worries of a loss of Russian supply are still out developments.q