OPEC a group of the world’s largest oil producing nations has officially announced that it will be cutting oil production starting in January. The drastic cuts in production will inevitably cause the prices at your local pump to start rising. The news of these cuts alone caused the price at my local pump to jump 15 cents in the span of just one day. The full impact of these cuts aren’t expected to hit until January, but already oil speculators are getting ready.
Now normally I would laugh at almost anybody who blamed oil prices on a president. Generally people who do so know little or nothing about how and why oil prices are actually set, but in this particular case the timing of these cuts are no coincidence. This is the first time OPEC has agreed to cut oil production in eight years(how long President Obama was office), and they’re doing it perfectly to coincide with Trump’s inauguration.
So the question is why? The answer is pretty simple. President Obama made the move toward renewable resources a chief plank of his administration. He wasn’t as successful as he would have liked to have been, but the pure and simple fact that he made the threat mattered.
If you’re an OPEC country who’s primary source of income is oil production the threat of the United States moving away from oil entirely and coming up with new technologies that require no oil whatsoever should terrify you. If and when that happens your entire country will be ruined. The value of your biggest natural resource would plummet to nothing.
What then is a major oil producing company to do? Simple, you kill two birds with one stone. You radically increase your oil output. This has two effects. One, it radically lowers the price of oil, and makes it less likely that the United States will move away from it. Why would anybody buy an electric car when the price of gas is dirt cheap. Second, it makes sure you get something for your oil while you still can. Inevitably the world will begin to move away from oil so if you don’t use it up then you lose it. They figured they might as well pump as much of it out of the ground as they can. Even if they can’t get as much as they want for it that’s still better than nothing.
But now that America has elected Donald the Dumpster Dumbface into the White House there is no more reason to fear. Oil companies are now firmly back in control of the United States which means that demand for fossil fuels aren’t going anywhere anytime soon. Without fear that renewable resource will come along and make their oil worthless there’s no reason to blow threw it quickly, and there’s no reason to motivate Americans not to buy electric when their own dumb president will likely make that impossible anyway.
The result is a return to higher oil prices. They can now pump out fewer barrels of oil making it last longer, and charge significantly more money for each barrel. Thanks Trump!
In fact the fear that President Obama and Democrats would get us off fossil fuels was so high that some OPEC nations like Russia were driving themselves into recessions by keeping their prices so low in desperation to not lose their cash cow. Still don’t believe Russia influenced the election?
So in a few months after Trump gets inaugurated and gas prices start heading north again make sure all your Obama hating friends that tried to blame him for oil prices at the beginning of his presidency, and then didn’t give him credit for them falling towards the end know exactly what is Making Gas Expensive Again.