With US gasoline prices still above $4.50 per gallon, president Joe Biden is under immense pressure to balance the global oil market. Asking consumers to use less oil is a political dead end. His best bet is to get producers to pump more out more barrels. He hopes to do that during a visit to Saudi Arabia and the United Arab Emirates this week.
The problem is that global oil production is already running practically full-steam. Production in the US’s biggest shale oil basin hit a record in June. For some OPEC members, including Nigeria and Libya, drilling is crippled by mismanagement and conflict. Saudi and the UAE have a bit more drilling capacity, but it’s unclear if they will be willing or able to put it to use. Consider this data from June:
Making a dent in gasoline prices will also be tough, given that US oil refining capacity is at an eight-year low. And the plants that are online are failing to eke out a profits over the high price of oil.
In a July 12 forecast, OPEC said it expects global oil supply to lag behind demand well into 2023. So don’t hold your breath for a break at the pump.