Tags: gas prices | midterms | inflation | opec | slash production

Potential OPEC Production Cut Would Spike Gas Before Midterms

the logo of opec
The logo of the Organization of the Petroleum Exporting Countries (OPEC) is seen at the headquarters building in Vienna on April 4, 2013. (Alexander Klein/Getty Images)

By    |   Tuesday, 04 October 2022 07:12 AM EDT

A looming decision by OPEC on whether to slash production could lead to another spike in oil prices – this time ahead of the United States' midterm elections in November, The Hill reported.

The potential cut, which might be as large as 2 million barrels per day, would likely reverse much of the Biden administration's progress on tackling gas prices and inflation over the last several months.

News of a pullback comes after President Joe Biden approved the fifth emergency sale from the U.S. strategic oil reserves in July. It was a risky move that directly hurt OPEC's hold on the market and could now instigate retaliation.

"This is probably a little bit of payback," Price Futures Group analyst Phil Flynn said. "The Biden administration early on was saying they were going to use their strategic reserve to teach OPEC a lesson.

"But the strategic reserve isn't big enough to control prices for an extended period of time," Flynn continued. "And even though it might have had some influence on prices for a little while, now you could see prices getting up higher than they would have been because there wasn't a production response from the oil companies."

Now, the price of gas and U.S. reserves could once again rise to the top of people's minds as the midterm elections loom. According to a FiveThirtyEight average, Democrats currently lead Republicans by 1.2 percentage points in the wake of November, 45.4% to 44.2%.

Parading the fall of gas prices has been a centerpiece of Biden's "Build Back Better" messaging strategy, with Democrats' vocalizing their sustained optimism on the issue as late as August.

"Gas prices are very important to voters, and it coming down bodes well for Democrats everywhere in America," Democrat strategist Dale Butland told Bloomberg. "You see it every time you fill up your tank."

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Newsfront
A looming decision by OPEC on whether to slash production could lead to another spike in oil prices - this time ahead of the United States' midterm elections in November, The Hill reported.
gas prices, midterms, inflation, opec, slash production
307
2022-12-04
Tuesday, 04 October 2022 07:12 AM
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