Tim Stewart, president of the American Oil and Gas Association, responded to Democrats’ calls for the Department of Justice to investigate “big oil companies” over high gasoline prices on “The Bottom Line.”
The Organization of the Petroleum Exporting Countries (OPEC+) agreed on Sunday to extend production cuts into next year, keeping oil prices likely to remain high until the presidential election in November.
The coalition said after the meeting on Sunday that the move was aimed at boosting oil prices, which have remained sluggish despite the ongoing war in Gaza and attacks on shipping in the Red Sea.
Russian Energy Minister Alexander Novak (left), Saudi Arabia’s Prince Abdulaziz bin Salman (left) and UAE Foreign Minister Suhail Al Mazroui (center) leave with other delegations after the end of the OPEC meeting in Riyadh on June 2, 2024. (Haitham El Tabei/AFP via Getty Images/Getty Images)
International benchmark Brent crude prices have been in the range of $81-83 per barrel for the past month, far from the $100-per-barrel mark not seen since late 2022. The reasons for this include rising interest rates, demand concerns due to slower-than-expected economic growth in Europe and China, and rising non-OPEC supply, including from U.S. shale producers.
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The coalition announced that it would extend the additional voluntary cuts of 1.65 million barrels per day announced in April 2023 until the end of December 2025.
Saudi Arabia, the leader of OPEC+, is trying to diversify its economy away from fossil fuel exports and badly needs the cash inflow, and higher oil prices would help OPEC+ ally Russia maintain economic growth and stability as it spends heavily on its war with Ukraine.
FILE PHOTO: In this illustrated photo, a 3D printed oil pump jack is seen in front of the OPEC logo, April 14, 2020. REUTERS/Dad Lubic/File Photo (REUTERS/Dado Ruvic/File Photo/Reuters Photo)
Analysts say the production cuts could boost oil prices in coming months and will be a focus in the run-up to the November election. Demand typically surges through the summer through September, but there is more uncertainty about demand after that.
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U.S. motorists are benefiting from lower crude oil prices, which have been stagnant in recent weeks, averaging $3.56 a gallon last week, just one cent lower than a year ago and down from a national average high of $5 a gallon in June 2022.
The Associated Press contributed to this report.
