OPEC, The Organization of the Petroleum Exporting Countries met on Friday to speak about current oil production levels. They have decided to maintain current oil production levels even as members of OPEC apparently are in disagreement regarding the strategy.
OPEC has been trying to maintain their market share as new oil producing countries continue to overtake their collective market share. The group has hit a record high production cap of 31.5 million barrels per day which continued to surpass demand. This record production began last year as the organization tried to outshine the fracking boom in North America.
This overproduction by OPEC has crushed oil prices around the globe as prices hit multi-year lows. U.S. oil producers have cut costs in order to stay competitive even as OPEC attempts to run them out of business. Their decision to increase the production cap is also due to accommodating new and high producing members.
Indonesia recently rejoined the group and Iraq is increasing production at the fastest rate when compared to the rest of the world’s oil producers. Furthermore, Iran’s oil production has been stifled by international sanctions but once these sanctions are lifted it is expected their oil production will once again skyrocket.
Monday 12/7/2015, oil prices continued to fall, and at the same time business and government officials wonder if they should end the oil export ban to further U.S. competitiveness with OPEC nations. Many think it would undermine the renewable energy efforts the U.S. has made in recent years. But as OPEC refuses to cut production, the U.S. has the potential to begin competing with them to control more of the market. This would allow small and large oil companies to increase oil exploration and drilling efforts to help stimulate the economy. Manufacturers have an opportunity to supply the equipment and heavy machinery these oil companies would need to expand their operation.
Manufacturers and oil companies are calling for the oil export ban to be lifted. As oil prices drop, many oil companies are feeling the pressure, but offering more opportunities to export the oil where the U.S.’s “sweet” crude fetches premium prices can do a lot of good for our economy.
However, this is a very delicate situation and many don’t think the economic benefits would outweigh the damage done to the environment. Especially now that renewable energy has been rapidly catching on, lifting the ban could put renewable energy efforts on the backburner as oil prices continue to stay low. Could oil companies use OPEC’s latest decision as leverage to lift the ban? Or will the White House stand by their decision to focus on renewable energy and continue their attempt to leave oil in the dust? Let us know what you think at Info@mfgtalkradio.com or any of our social networks.
Learn more about the U.S. Oil Export Ban: https://mfgtalkradio.com/what-does-lifting-the-crude-oil-export-ban-really-mean/