It’s something we all fear: the gas prices going up. Dread will fill any driver, young or old, to see the cost to power their car go from a comfortable $2 to $4, or even higher. We’ve enjoyed cheap gas for several months now, but unfortunately that time may come to an end.
The Organization of Petroleum Exporting Countries (O.P.E.C), along with Russia, has come to an agreement to cut production in order to increase oil prices. O.P.E.C consists of some of the largest oil producers in the world, including Saudi Arabia and Venezuela. The U.S.A, Russia, Norway, and Canada are not members, however, despite the fact that those countries produce a lot of oil collectively. Russia is participating in the rollback regardless of the fact that they are not a member of the O.P.E.C.
O.P.E.C hopes to increase prices for their oil to beat back the booming fracking industry in the U.S. Fracking has caused a significant drop in demand for their oil, slicing their profits. First, the organization tried to flood the market with cheap gas in order to increase profit, but that failed. Fracking hasn’t gone away, if anything it’s grown, and the O.P.E.C failed to increase their profits accordingly. The U.S oil industry is very strong. Oil prices are stable at $48 per barrel, gas prices are still below two dollars in some areas.
Personally, I think that this decrease in production will fail in a similar fashion to the organization’s other attempts at making a profit. An increase in the oil prices is almost certain as a result, bringing an end to these luxury days of $1.90 per gallon, but the O.P.E.C overall attempt to regain control over the vast U.S oil market will not work out. The election of protectionist President-elect Donald Trump will probably put yet another obstacle in front of their attempts, allowing the fracking industry to benefit further by being able to offer cheaper oil for gas production.