Source: Saudis, other oil giants announce surprise production cuts | AP News DUBAI, United Arab Emirates (AP) — Saudi Arabia and other major oil producers on Sunday announced ... cuts totaling up to 1.15 million barrels per day from May until the end of the year, a move that could raise prices worldwide. Higher oil prices would help fill Russian President Vladimir Putin’s coffers as his country wages war on Ukraine and force Americans and others to pay even more at the pump amid worldwide inflation. It was also likely to further strain ties with the United States, which has called on Saudi Arabia and other allies to increase production as it tries to bring prices down and squeeze Russia’s finances. The production cuts alone could push U.S. gasoline prices up by roughly 26 cents per gallon, in addition to the usual increase that comes when refineries change the gasoline blend during the summer driving season, said Kevin Book, managing director of Clearview Energy Partners LLC. The Energy Department calculates the seasonal increase at an average of 32 cents per gallon, Book said. . . . Elon Musk has a grin on his face with this news. Renewable energy and electric cars just became even more popular. Tesla's 2023 Q1 production and delivery numbers suggest the extra 20,000 Teslas will sell quickly. Best of all, every Prius just got a cold cash compress if or when sold. Bob Wilson
Still more than half of maximum once held, and that was back in 2010. U.S. Ending Stocks of Crude Oil in SPR (Thousand Barrels) There's been some level of drawn down since 2016.
The article suggests OPEC is doing this price increase to support Russia. But this is just a temporary trigger for a long term effect. As transportation moves towards electrification and efficient hybrids, the reduced oil revenue will encourage more production limits to increase the cost. A feedback loop, higher fossil fuel costs will accelerate renewables, nuclear, and individuals choosing more electrification. Bob Wilson
These are the last gasps of OPEC and Russia manipulating the price of oil, if US, China, and Europe work together they can destroy OPEC's monopoly power. There are about 372 Million barrels in the strategic oil reserve, about 200 Million down from a year ago and 250 million down from when the US started releasing oil as a lever against russia and OPEC gouging. The US produces about 12 million barrels a day and is expected to climb to 12.6 million barrels a day by the end of the year. Opec said it is dropping production by 1.16 million barrels a day. That means with increased US production the short fall is around 700,000 barrels a day. The strategic oil reserve can pump out a million barrels per day for a year if prices climb above $95/bbl then buy it back cheaper when opec realizes people are switching to vehicles that use less oil. The average price paid to fill the reserve was under $30/bbl. The wild card is china, if they start driving a lot more miles per year, but the chinese government knows this and that is why they are trying to switch to plug-in vehicles and eliminate the power of OPEC and the Russians have over their economy.
My understanding is Chinese EV prices have achieved parity and even lower than fossil fuel vehicles. The Chinese also have access to micro-EVs that could not be sold in our market. Some look like the old 'compliance' junk. Bob Wilson
Plug-ins reached 33% market share in china last year, that 5.9 million plug-ins in China was a lot bigger than the the 4.2 million light vehicles sold in japan last year (4.2 million). Its a huge market that should drive costs down for both phevs and bevs. I do not know if there was a change in incentives but it is working. Europe plug-ins reached 2.6 million last year or 23% market share. I don't see phev sales in the US but BEVs reached 757 K last year a 5.6% market share. The IRA plug-in vehicle incentives should help the US play catch up to china and Europe. Global Plug-In Electric Car Sales Exceeded 10 Million In 2022.
I don’t have the source handy but I understand China eliminated the EV subsidy because it was keeping smaller, inefficient EV makers in business. Bob Wilson
When this topic came up in an outside discussion yesterday, I found that it was half full: Weekly U.S. Ending Stocks of Crude Oil in SPR (Thousand Barrels) Last year's release produced a $4 Billion profit, at an average sale price of $96.25/barrel. In December, they requested bids to start refilling it at $70-75/barrel. I haven't looked for subsequent updates, but today's commodity price for WTI is $75.67/barrel
the down side (for example) is if fuel prices double then all of the rail & trucking infrastructure that has to get stuff to us doubles in cost as well - & that means basic things like food become less affordable for the poorer Joe's and Joanne's. If those kinds of essentials get too expensive than the last thing on people's mind will be buying a new electric car - or any car for that matter. .
Good grief, my gas bill for the week was $13.50 the same as the week before and the week before. The sky is falling.
Pepsi taking delivery of the first Tesla semi trucks is quite timely. Best of all Ford, GM, and Rivian are producing electric delivery vehicles. These are substantially cheaper per mile to operate and all but demand depot charging at wholesale electric rates. Bob Wilson
