Renata told me Sunday morning that OPEC’s decision to reduce oil production by 2 million barrels daily cost 13 cents per gallon – and the reduction doesn’t start until November comes around. So I went looking for a chart that could bring everything into perspective and I found this one:
I like that I could look back to what was essentially the pre-covid oil production – roughly 84 million barrels per day, watch the drop to 70 million barrels a day, then the increasing normalization bring oil production back to almost 79 barrels daily back in March. Once we have data, we can come closer in anticipating how much the 2 million barrel reduction will affect how we live.
In rough terms, we’re probably close to 80 million barrels per day, world-wide. Taking that as our base number, we’re looking at something like a 2½ percent decrease in available oil – and, if Renata’s experience at the gas pumps is typical, 13 cents increase on $4.80 is about 2.7%. Close – but the reduced production hasn’t kicked in yet. (Yeah, I’m buying premium because I’m afraid that 15% ethanol might run high)
The strategic petroleum reserve stood at 638 million barrels when Biden was inaugurated. On October 6, it reached a 38-year low of 416 million barrels. Since March 31, the strategic reserve has been releasing a million barrels a day to help lower fuel prices – which may explain why OPEC chose the 2 million figure over the 1 million figure.
As long as our politicians have 400 million barrels to play with, I don’t have the numbers to calculate the effect of the OPEC cut. My guess is that the plan is to get people paying enough for gas on election day that They will vote to replace the democrat majorities in the house and senate. Here in Lincoln county, our votes won’t make any difference – between the bastards in power Montana and the bastards in OPEC, reduced production isn’t something that we can vote about. Our only option is to pay more.