Officials with the Organization of Petroleum Exporting Countries (OPEC), Russia, and other oil-producing nations decided Nov. 4 not to raise oil production substantially, in a rebuff to President Joe Biden’s request last week.
The decision not to increase foreign production may ease some concerns at U.S. ports, like Los Angeles and Long Beach, that are already dealing with record numbers of container cargo ships. Any additional oil tankers flooding the ports could further the supply chain crisis, according to the U.S. Oil and Gas Association.
“Clearly there will be a significant increase in tanker traffic at all ports—and even an additional handful of ships at the crowded SoCal ports will add to the huge backlog,” association spokesman Tim Stewart told The Epoch Times via email on Nov. 2.
Biden asked oil-producing nations last week to increase production to ease the price of crude.
OPEC members decided instead to stick to a schedule to increase production by 400,000 barrels a day, a modest amount that is not expected to relieve the high cost of gas consumers continue to pay at the pump.
Consumers are seeing the cost of gas skyrocket to seven-year record highs at the gas pump. The average cost of gas in the U.S. reached $3.42 on Nov. 4, according to the American Automobile Association.
“The reality is this—the US oil and gas producers are the most environmentally responsible, most closely regulated and the best corporate citizens of the entire global oil and gas industry,” Stewart said. “We heat people’s homes, we help them put food on the table and help clothe their kids while providing billions of dollars to states and the federal agencies in conservation dollars for fish, wildlife, parks and trails.”
Oil futures on Thursday lost earlier gains with Brent crude trading at about $82 a barrel and West Texas Intermediate about $8 a barrel.
Domestic Supply Increases
Several major oil companies, including BP, Chevron Corp., and Exxon Mobil Corp. announced on Nov. 3 they were planning to increase output or shale spending next year, according to Reuters.
“As oil prices rise, it’s increasingly likely that oil production growth resumes,” said Josh Young, chief investment officer of energy investor Bison Interests. The gains, however, will remain below the rate of pre-COVID-19 increases, he told Reuters.
Overall U.S. crude production rose last week to 11.5 million barrels per day, according to the latest U.S. Energy Department figures, Reuters reported.
The shale production will come located in the Permian Basin, the top U.S. shale field, located in Southeast New Mexico and West Texas.
Permian output is forecast to hit 4.89 million barrels per day in November, just below the peak 4.91 million barrels per day of March 2020 before the pandemic hit, according to Reuters.