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Oil Prices Drop As COVID-19 Surges, US Wants NOPEC

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zbynek-burival-GrmwVnVSSdU | Oil Prices Drop As COVID-19 Surges, US Wants NOPEC | Featured

Oil prices fell Tuesday due to renewed attempts by the US lawmakers to pass the NOPEC bill. In addition, another COVID-19 resurgence threatens to lower demand among major oil importers.

“There’s a whole bunch of stuff going on, and none of it is too good for oil,” said John Kilduff. Kilduff is a founding partner at New York energy hedge fund Again Capital. 

RELATED: Oil Prices Shoot to $71 As Saudi Arabia Depot Attacked

Oil Prices Go Down

New York-traded West Texas Intermediate, the benchmark for U.S. crude, went down by 1.2%, or 76 cents, to settle at $62.67 per barrel. Before the markets closed, oil prices fell down to $61.54.

Meanwhile, London-traded Brent, the global benchmark for crude, fell by 0.7 or 48 cents. Brent crude closed at $66.57, but only after enduring a drop to $65.54 earlier in the day.

COVID-19 Resurgence

Major oil-consuming countries such as Japan and India are currently experiencing new COVID-19 surges. India, the third-largest crude oil consumer after China and the United States, is currently overwhelmed with new COVID-19 cases.

Now, India is recording more than 250,000 new infections and over 1,700 deaths a day. As such, the country is now the second leading home of the virus, with over 15 million as of Tuesday.

The United States remains at the top spot with more than 31 million cases. Overall, total global cases of COVID-19 are at 141 million. Until the virus issue gets addressed, India expects to impose new lockdowns, which can significantly reduce demand for oil. 

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Meanwhile, Japan is also implementing measures to keep the virus under control. The world’s fifth-largest oil consumer will require all incoming passengers to produce proof of a negative COVID-19 test upon arrival at Japanese airports.

Japan will deny entry to those who fail to submit their certification. In addition, both countries postponed a planned foreign and defense ministerial talks scheduled this weekend in Tokyo. 

NOPEC Bill

Meanwhile, a US legislative assembly panel passed a bill that can directly affect operations of the Organization of Petroleum Exporting Countries (OPEC). The bill aims to open OPEC to lawsuits for alleged price-fixing practices. 

The so-called NOPEC bill stands for No Oil Producing and Exporting Cartel. Introduced by Representative Steve Chabot (R-OH), the bill passed a voice vote in the House Judiciary Committee. 

Previous attempts to hold OPEC accountable for oil price increases have yet to show results in Congress for over 20 years. The NOPEC bill, while securing committee-level approval, will now have to seek approval from the entire US House of Representatives.  

High Oil Prices Due to Oil Production Restrictions

“It’s high time that we do more to fight … production controls that continue to keep the price of crude oil and gasoline arbitrarily high in the United States,” Chabot told the committee before calling for the vote.

In fact, oil prices already rose 33% for this year. Last Tuesday, it hit $68 per barrel for Brent crude, its highest level in a month. In 2008, the House passed a similar bill when oil rose to more than $100 a barrel.

Prior to the increase in prices, OPEC+, which is OPEC plus Russia and other oil allies, agreed to gradually ease oil output cuts beginning May. This aimed to support many governments’ efforts to reopen their economies. 

In addition, US Energy Secretary Jennifer Granholm called on top OPEC producer Saudi Arabia to keep energy affordable for consumers.

US Oil Inventory

According to Investing.com, US crude stockpiles likely fell by 2.9 million barrels last week. This represents lower inventories compared to 3.5 million barrels stockpiles last week.

Meanwhile, gasoline inventories likely went up by 650,000 barrels versus the rise of 309,000 in the prior week. Also, stockpiles of distillates likely declined by almost 900,000 barrels last week after falling by 2.08 million barrels a week earlier.

Watch the Economics AltSimplfiied video reporting how the global economy could look without OPEC?

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Do you think that oil prices are too high now? Also, do you support the NOPEC bill that aims to make OPEC accountable for price increases in oil and oil products?

Let us know what you think. Send us your comments on oil and oil prices in the comment section below.

17 Comments

17 Comments

  • JEFF MILLER says:

    yes…

  • arlie says:

    NO cause we shouldn’t be buying foreign oil in the first place and if it wasn’t for biteme we wouldn’t be in this situation!
    We was total independent under Trump.
    Biteme is worse than Obumer in trying to destroy America!!!!

  • Gal says:

    Why do we even care about what’s happening with OPEC. Thought we where energy independent less than 6 months ago. It seems the United States is under siege from within. Our policies seem to be favoring foreign interests once again! This is what happens when foolishness reigns. God help us all.

  • ROBERT A. ABADIE says:

    DO YOU REALLY THINK THAT THIS BIDEN SON OF A BITCH IS GOING TO DO ANY THING TO SAVE
    OIL?? HE HATES OIL. THE BASTARD SHOULD BE BOILED IN IT, IT WOULDE MAKE IT EASIER FOR THE CROWWS TO MEAT

  • Robert Reiners says:

    Re open keystone. Back to two dollar fuel. Going paying jobs for thousands on Americans & Canadians.

  • John Doe says:

    Remove restrictions on US production of energy products, i.e, fossil fuels. Start with reversing the BA shutdown of the Keystone project. Eliminate artificial support of alternative energy sources that have not proven to be competitive in the energy market. These actions will benefit all consumers and render the US a net exporter of energy and thereby lowering the cost to businesses and retail customers.

  • Ray says:

    Increase USA production! KEEP America FIRST!👍🇺🇸

  • James Strickland says:

    The only way to achieve anything is to increase local production which decreases our dependence on outside sources.

  • Darrel Arnett says:

    I agree. KEEP AMERICA FIRST .

  • Richard Delisle says:

    Stop exporting our oil. What we pump in America should stay in America. The big boys can live on millions instead of billions sticking it to the everyday Americans.

  • William Phillips says:

    The production of oil locally only need be increased by 10-15% to alter any OPEC gouging. The rich people like to see the oil prices up because if anyone pays attention, oil is the driving force of the stock market. Oil goes up the market goes up. Been that way the 60 years that I’ve been around. You can check that fact for yourself. I’ll bet Biden is playing both sides of the coin in the market. He has investments in both oil and alternate energy. That POS doesn’t give a crap about the real working person.

  • Shovelhead Mike says:

    TRUMP 2024

  • John Null says:

    My family was involved in oil and oil supplies way back in Louisiana. It supported a lot of people, and the current TRAITORS in charge are determined to turn America into another Cuber(Cuba), Venezuela, Russia, China, and WE THE PEOPLE just stand around and watch the Crazies like Waters yell and scream “riot, kill, destroy” and DO NOTHING. When will enough be ENOUGH???????

  • Roger A Wells says:

    We need to go back to producing our own oil so we don’t have to worry about the pricing of OPEC. Since Biden has become President fuel prices have increased .80 cents to a dollar. Plus it will put Americans back to work.

  • tony herndon says:

    we shouldnt depend on other countries for some things . we should try to make it on our own as much as we can like bring plants we need here making our own metal / car parts / pipe / and some house hold items to .

  • Anonymous says:

    Use our own oil. We have enough for everone in our country. Stop exporting it. End of story.

  • David Pugh says:

    Keep our oil for Americans.open up our own oil fields again.

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