Latest News

Biden says he’ll release 10 million more barrels from the dwindling ‘oil piggy bank’ after OPEC’s production cuts — but this is the big risk with more withdrawals

0

S&P 500

3,639.66

-104.86(-2.80%)

 

Dow 30

29,296.79

-630.15(-2.11%)

 

Nasdaq

10,652.40

-420.91(-3.80%)

 

Russell 2000

1,702.15

-50.36(-2.87%)

 

Crude Oil

93.20

+4.75(+5.37%)

 

Gold

1,701.80

-19.00(-1.10%)

 

Silver

20.16

-0.50(-2.42%)

 

EUR/USD

0.9743

-0.0052(-0.54%)

 

10-Yr Bond

3.8830

+0.0570(+1.49%)

 

GBP/USD

1.1098

-0.0071(-0.63%)

 

USD/JPY

145.3300

+0.2620(+0.18%)

 

BTC-USD

19,577.70

-353.52(-1.77%)

 

CMC Crypto 200

445.50

-9.53(-2.09%)

 

FTSE 100

6,991.09

-6.18(-0.09%)

 

Nikkei 225

27,116.11

-195.19(-0.71%)

 

Biden says he’ll release 10 million more barrels from the dwindling ‘oil piggy bank’ after OPEC’s production cuts — but this is the big risk with more withdrawals

In an effort to counter rising prices at the pump, President Biden plans to plunder the country’s “oil piggy bank.”

In November, the Department of Energy will deliver 10 million barrels from the Strategic Petroleum Reserve (SPR) to the market. The SPR — the world’s largest supply of emergency crude oil — was established back in 1975 in case of a severe oil supply crisis or economic disruption.

Biden’s decision comes after the Organization of the Petroleum Exporting Countries (OPEC+) said it would slash oil production by 2 million barrels a day — putting extra pressure on the global energy supply.

However, with the country’s emergency reserve already at its lowest levels since 1984, some experts have concerns about the long-term implications.

Don’t miss

Invest your spare change and turn your pennies into a productive portfolio

A TikToker paid off $17,000 in credit card debt by cash stuffing

You could be the landlord of Walmart, Whole Foods and Kroger

U.S. gas prices are going up again

Gas prices hit a record high of $5.02 a gallon in June after Russia’s invasion of Ukraine, but this summer saw a 99-day streak of lower prices due to recession fears and declining oil prices.

However, even before OPEC+ declared it would be cutting back on oil production, gas prices began inching back up again in late September. This may have been due to a combination of increasing demand, refinery issues and the upcoming European ban on Russian oil.

Now with OPEC+’s recent decision, prices are expected to escalate even further. The group says the production cuts are being made due to “the uncertainty that surrounds the global economic and oil market outlooks.”

As of Oct. 7, the average national gas price was $3.89 per gallon, which is about 10 cents higher than the week before, according to AAA.

Biden disappointed by ‘shortsighted’ production cut

Hours after the OPEC+ announcement, the White House said the president was disappointed by “the shortsighted decision by OPEC+ to cut production quotas” as the global economy is still contending with the effects of Russia’s invasion of Ukraine.

The press release noted that 10 million barrels of oil would be drained from the SPR and the Secretary of Energy would be exploring other options to increase domestic production.

Read more: Do you fall in America’s lower, middle, or upper class? How your income stacks up

Biden also urged gas companies to keep bringing gas prices down.

Why making big withdrawals from the reserve could be risky

Since March, the Energy Department has released 160 million barrels of crude oil, or over a quarter of the stockpile — draining the SPR to its lowest levels in four decades.

As of Sept. 30, the reserve has dropped to 416 million barrels, according to department data.

The Independent Petroleum Association of America (IPAA) stated back in Nov. 2021 that it strongly opposed tapping into oil stockpiles to counter gas prices. The group’s concern was that depleting the emergency reserve could put the U.S. at risk if the global or domestic oil supply reaches dangerously low levels before the supply can be brought back up.

The IPAA recommends ramping up domestic natural gas and oil production instead, although oil producers are already dealing with supply-chain issues, limited capital and investor pressure to boost returns.

Francisco Blanch, managing director and head of global commodities at Bank of America Global Research also voiced criticism in a segment on Bloomberg Television.

“I don’t think it’s a great idea given the incredibly tense geopolitical world we live in today,” Blanch said. By using up the reserve, the U.S. could be putting itself “more in the hands of OPEC+ … eventually you’re just ceding more and more market control.”

What to read next

‘I just can’t wait to get out’: Nearly three-quarters of pandemic homebuyers have regrets — here’s what you need to know before you put in that offer

‘Remarkable reversal’: President Biden just (quietly) scaled back student loan forgiveness — and the change could impact up to 1.5M borrowers. Are you one of them?

House Democrats have officially drafted a bill that bans politicians, judges, their spouses and children from trading stocks — but here’s what they’re still allowed to own and do

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Advertisement

Consequence of Sound

Right Said Fred Change Minds, Call Beyoncé “Arrogant” for Using “I’m Too Sexy”

The band previously thanked Beyoncé for using their song. Her reps called the critcism “erroneous and incredibly disparaging.” Right Said Fred Change Minds, Call Beyoncé “Arrogant” for Using “I’m Too Sexy” Wren Graves

The AV Club

Mila Kunis addresses infamous rumor (that she started) about her age on That ’70s Show

What a fascinating legacy That ’70s Show has: still popular enough to warrant a reboot, controversial enough that no one in the reboot can mention why one of the main characters won’t be returning. One of the series’ fictional romances spawned the real-life Hollywood power couple of Ashton Kutcher and Mila Kunis (sort of; they officially got together long after the show ended). And Kunis only got on the show in the first place after lying about her age, or so the story goes.

Miami Herald

Mahi mahi are dwindling and Keys charter boat captains agree why. ‘This is disgraceful.’

Jon Reynolds, a Florida Keys charter boat fishing captain, opened up a plastic trash bag Thursday night during a meeting with federal regulators and pulled out a huge ball of thick monofilament line that’s used to target en masse mahi mahi, also commonly known as dolphinfish.

Bloomberg

New York Mayor Adams Declares State of Emergency Over Migrant Crisis

(Bloomberg) — New York Mayor Eric Adams declared a state of emergency over the city’s migrant crisis, saying that the recent arrival of more than 17,000 asylum-seekers from Central America and South America is straining the city’s resources. Most Read from BloombergBiden Says Putin Threats Real, Could Spark Nuclear ‘Armageddon’Stock Traders Hit Sell Button on Hawkish Fed Bets: Markets WrapBiden Should Hit Saudi Arabia Where It Really HurtsKremlin Lets State Media Tell Some Truths About Putin’s

Yahoo News

California parking space law aims for affordable housing and climate change ‘win-win’

In an effort to lower the cost of construction and cut down on car dependence, California has recently adopted a law that prohibits local governments from setting minimum parking requirements for new buildings within half a mile of a transit hub.

Yahoo Sports

Local Denver station apologizes to viewers after brutal Broncos-Colts game: ‘It burns the retinas’

“I was here and I didn’t even want to watch it.”

Yahoo Sports

Draymond Green punching Jordan Poole strained any equity he built with the Warriors

Draymond Green, or rather, Mr. Curry, has work to do.

The Daily Beast

Putin’s Own Allies Turn On Him as Ukraine Unleashes Hell in Stolen Russian Tanks

Sergei Karpukhin/ReutersHot on the heels of embarrassing reports of Russian recruits fighting each other and Moscow loyalists calling for Kremlin ministers to kill themselves, it seems the rage against Vladimir Putin’s handling of his invasion of Ukraine is now openly being conveyed to the man himself by members of his own inner circle.A report Friday—which is Putin’s 70th birthday—said that one of the despot’s closest allies had openly challenged the disastrous way the war was being conducted.

NBC News

Sara Lee, former WWE ‘Tough Enough’ winner, dies at 30

Sara Lee, winner of the 2015 WWE “Tough Enough” reality television series, has died at the age of 30, her mother and the wrestling organization said Thursday.

Costco Credit Card Secrets Members (and Investors) Should Know

Previous article

Most Retirees Shouldn’t Sell Stock Now. Here’s How to Know When It’s Necessary.

Next article

You may also like

Comments

Leave a reply

Your email address will not be published. Required fields are marked *

More in Latest News