As I guesstimated might happen a few days back, the record string of consecutive days with falling gasoline prices at the pump has come to an end. AAA reports that prices increased from $1.656 on Friday to $1.66 Saturday and then $1.663 today. I thought the $1.60-$1.65 range was a likely bottom based on wholesale gasoline prices, and that has proved to be correct for now. But OPEC decisions and the weather will determine whether this temporary bottom ends up a long-term trough.
OPEC will meet on Wednesday, the 17th, and announce a cut in production. Some OPEC members are claiming this cut may be surprisingly large so that oil prices climb back toward $70 per barrel. Such a cut could be 2-2.5 million barrels per day and may include a promise from non-OPEC Russia to cut as well. Colder than average weather would also be a bullish pull on prices since it would increase demand for heating fuels. Time will tell.
The best thing we can do as importing consumers is to focus on efficiency and domestically-available substitutes such as wind, solar, and natural gas. Such a sustainable energy transition would prevent oil prices from climbing back toward records even if the OPEC cuts are dramatic and the weather unusually cold. Such efforts will be good for our struggling economy and win us friends worldwide in the ongoing effort to curb greenhouse gas emissions (Europe and others leading in Poznan need our partnership to effectively mitigate global warming).
Onwards in the sustainable energy transition-
Tags: climate change, energy, gas price, global warming, Oil, OPEC