Financial Times/ Derek Brower, David Sheppard, Andrew England and Felicia Schwartz/10-8-2022
“Their decision to slash 2mn barrels a day from production targets, or 2 percent of global supply, might sound modest. But doing so while Brent crude was trading at a lofty $90 a barrel — almost twice its long-term historical price — is a threat to a global economy stalked by inflation and mounting consumer anxiety about energy prices and shortages. And it marks a new and perhaps dangerous breach between producer and consumer countries, especially between the US and Saudi Arabia.”
USAGOLD note: Energy is an issue once again – or perhaps it has always been – but the cost of energy is a component at some level in the price of just about everything. Thus the deterioration in relations between the United States and the oil-producing Gulf states becomes a major issue. The Biden administration’s tactic of restricting US exports to shore up domestic stockpiles might serve a purpose, but it also plays into the hands of OPEC, and its desire to pump up prices. In a certain sense, it makes the US inadvertently a full-fledged member of the oil cartel. Few of our more seasoned readers will read the headline above without being reminded of the 1970s.
