Would pump prices go down if the world had 25 million more gallons of gasoline each day?
OPEC’s dozen member countries meet Wednesday to talk about oil prices, supply and demand. These oil-rich nations pump one-third of the world’s crude oil supply. Their geological luck has brought trillions of dollars into their economies over the past few years, thanks to higher prices fed by an insatiable and growing global thirst for petroleum.
Some of these same countries now are facing frustrated citizens, angry the spoils of oil have been funneled off to international bank accounts instead of being put to work locally.
Americans are frustrated as well. We’ve resigned ourselves to a new normal for pump prices. We long for the “good old days” of 2006 and $2.50-per-gallon gas. If OPEC decides to pump more oil this week, it may make a small dent for U.S. prices.
OPEC acts in self-interest. It knows two big customers -- America and Europe -- are having a tough time swallowing high prices. But new customers, such as China and India, are absorbing and demanding more.
The oil brewed to make the gasoline we put in our tanks has a 1 in 4 chance of coming from an OPEC country. It’s about the same odds the oil started in Canada or Mexico before reaching American gas stations.
The amount of an increase in oil production OPEC is considering amounts to about three days’ worth of gasoline for us. And we have to share that gas with the rest of the world.