I hope that President Joe Biden got a T-shirt on his August trip to Saudi Arabia. You know, one that says “I went to Saudi Arabia and all I got was this lousy T-shirt.”
Because the U.S. President sure didn’t get a surge in OPEC oil production.
In September the oil cartel plus Russia agreed on a piddling 100,000 barrel a day increase in production in response to pleas from President Biden and other Western leaders to an increase in oil production to combat soaring energy proved.
On Sunday, OPEC took back that entire increase with a decision to reduce October production by that same 100,000 barrels a day.
That led to a Monday, September 5, surge in oil prices with U.S. benchmark West Texas Intermediate climbing by as much as 4.1% to over $90 a barrel. Today, with U.S financial markets open again after the Labor Day holiday, West Texas Intermediate is up 0.44% to $87.25 a barrel as of 12:30 New York time. International benchmark Brent crude is off 2.52% to $93.33 a barrel.
The jump in crude prices came after Russian energy giant Gazprom said gas flows along a key pipeline to Germany would not resume. The Russian company blamed maintenance problems at the pipeline. But the timing suggests retaliation and not maintenance. The shutdown came just after G-7 ministers had endorsed a U.S.-led initiative to cap the price of Russian oil. On Monday European natural gas futures posted the biggest intraday jump since March.
Oil traders are convinced that oil prices will climb from there. On Monday, Brent $200 call options for January saw increased trading volumes, following large trades of West Texas Intermediate $124 and $125 calls on Friday, Bloomberg reports.