OPEC to Decrease Production

Now that we are all seeing a moderation in gasoline prices, OPEC announced last week that it will decrease production by one million barrels a day beginning Jan. 1 to help curb its losses as a result of the weakening US dollar. So, you see, not only will gasoline cost US consumers more at the pump because the dollar is declining in world currency markets, but since the dollar is declining in world currency markets, gasoline will cost US consumers more at the pump. It all sounds highly logical to me--how about you?

Turns out that although OPEC could not control oil prices (to make them decline) throughout October and November as the price of a barrel of oil surged higher than at any time in 25 years, they CAN control it (so that prices go up) from now at least through the end of winter when US consumers will need the greatest amounts of oil. Amazing how that works out so well for them, isn't it?

Of course, OPEC's decision to cut production follows the sharpest decline in oil prices in some time, as a barrel of oil has dropped from $55 a barrel in October to around $40 last week. Keep in mind, however, that OPEC has promised the world markets a stabilized price at around $35 a barrel. Perhaps OPEC sees this move as a way to help stop the rapid decline and as a means to level off prices at that stable $35, but the move seems just as likely to add additional revenue to OPEC purses as the Northern Hemisphere approaches the long, cold, dark days of winter.

My prediction is that the United States will never again see the price of a gallon of gasoline drop below $1.50, and we will be lucky to see a national average at $1.85 a gallon. Get used to these prices America. As China becomes a bigger player in the world economy, and as the Chinese populace increases consumption of oil products--particularly gasoline for their growing automobile population--the United States will continue to see high demand for oil worldwide. As Detroit continues to build large SUVs and the high cost of hybrid technology continues to boost the price and discourage production of more environmental-friendly vehicles, the U.S. supply of oil will continue to diminish.

We need an administration that is more focused on ending dependency on foreign oil through alternative means rather than continually pushing for the development of oil fields in ANWAR. The United States cannot produce enough oil to offset the amount we currently import from OPEC (or even from Saudi Arabia), so why do we continue to focus our efforts on such a plan? Oh, that's right...the oil companies have the Congress and the Executive branch in their pockets!!