Trump Fills the Reserve
By Shoshana Bryen
Americans have had fairly stable energy prices for the past few years, and fairly low ones, in part due to the tremendous increase in energy production in the United States – both natural gas and oil. In 2018, the U.S. produced 95% of its domestic energy requirements, the largest share since 1967. Stability is also owed to a mainly-steady oil supply emanating from OPEC countries and Russia, making up for decreased supplies from Iran and Venezuela. Gas prices, the marker Americans watch almost to the exclusion of everything else, averaged $2.60/gal in 2019 , 4% lower than in 2018.
But while much of American energy is domestic, oil is a commodity with a single world-wide market. The choices other countries make ultimately affect our industry. In December 2016, Russia concluded an agreement with OPEC to balance output and stabilize price at an agreed-upon level – then at about $60/bbl. As expected, everybody cheated a little bit, but by the end of 2017, stability emerged. Saudi King Salmon paid his first ever state visit to Russia, where Russian President Vladimir Putin talked about major investments in the kingdom. In June of last year, the deal was extended for six to nine months. “Demand is softening a little bit, but I think it’s still healthy,” said Saudi energy minister, Khalid al-Falih. Read More…https://www.jewishpolicycenter.org/2020/03/19/trump-fills-the-reserve/