{"id":6184,"date":"2016-01-05T15:07:00","date_gmt":"2016-01-05T23:07:00","guid":{"rendered":"http:\/\/associatednews.info\/content\/troubles-are-up-in-the-middle-east-but-oil-prices-are-down-huh\/"},"modified":"2016-01-05T15:07:00","modified_gmt":"2016-01-05T23:07:00","slug":"troubles-are-up-in-the-middle-east-but-oil-prices-are-down-huh","status":"publish","type":"post","link":"https:\/\/associatednews.info\/content\/troubles-are-up-in-the-middle-east-but-oil-prices-are-down-huh\/","title":{"rendered":"Troubles Are Up In The Middle East, But Oil Prices Are Down. Huh?"},"content":{"rendered":"

By Marilyn Geewax<\/a><\/span> <\/p>\n

\"Prices,<\/a><\/div>\n
\n
<\/div>\n
\n
\n

Prices, as seen at a gas station in Woodbridge, Va., on Tuesday, are 21 cents a gallon cheaper than this time last year. The drop violates the historic rule that tension such as that currently between key producers Saudi Arabia and Iran causes the cost of a barrel of oil to rise. Saul Loeb\/AFP\/Getty Images<\/strong> hide caption<\/strong><\/p>\n<\/div>\n

toggle caption<\/strong> Saul Loeb\/AFP\/Getty Images<\/span><\/div>\n<\/div>\n

Oh, the irony.<\/p>\n

Historically, when political tensions increased in the Middle East, the price of oil rose too. Buyers of oil worried that conflicts could interrupt drilling or interfere with oil-tanker access to waterways. In theory, when risks rise, so do prices.<\/p>\n

But in recent days, even as tensions have been growing between two key oil producing nations \u2014 Iran and Saudi Arabia \u2014 oil prices have been falling. They slipped below $36 a barrel on Tuesday.<\/p>\n

Why?<\/p>\n

Experts explain it this way: The two countries are both in OPEC<\/a> but now are on such bad terms that they’d be unlikely to agree on anything \u2014 including a plan to reduce drilling. OPEC members are supposed to reach a consensus before changing production policies, and right now, the OPEC policy is to maintain existing high levels of pumping.<\/p>\n

“If they can’t agree on an output level and some way to control prices, then everybody will just keep all-out pumping and try to raise as much money as possible for their countries,” said Daniel Katzenberg, senior energy analyst at Robert W. Baird & Co.<\/p>\n

And there’s another big reason for the low global oil prices: America’s abundant supplies.<\/p>\n

On Tuesday, American Petroleum Institute President Jack Gerard, after delivering his annual State of American Energy address<\/a>, told reporters that low oil prices reflect the new U.S. role in energy markets.<\/p>\n

These days, even when Middle Eastern supplies face possible disruptions, oil buyers don’t panic; they know U.S. producers can fill any supply gaps, he said.<\/p>\n

“The geopolitics of energy has changed significantly over the last decade,” Gerard said. “The United States is now the world’s No. 1 producer of oil and natural gas.”<\/p>\n

Those U.S. oil supplies are “taking out a lot of the risk that we have seen historically” in OPEC-dominated energy markets, he said.<\/p>\n

“Our production in the United States today is around 9 million barrels a day; that’s almost doubled over the last five or six years,” Gerard said. “So the global market today is very different.”<\/p>\n

All of that is good for U.S. consumers, he said, noting that the U.S. Energy Information Administration says the average U.S. household saved nearly $700 on cheaper gasoline last year, compared with 2014.<\/p>\n

And 2016 may be even better for household budgets. The nationwide average price<\/a> for a gallon of regular is now $1.99, according to AAA, the auto club. That’s 21 cents cheaper than a year ago.<\/p>\n

NPR correspondent John Ydstie contributed to this report.<\/em><\/p>\n

This entry passed through the Full-Text RSS service – if this is your content and you’re reading it on someone else’s site, please read the FAQ at fivefilters.org\/content-only\/faq.php#publishers.<\/em><\/p>\n

Source:: http:\/\/www.npr.org\/sections\/thetwo-way\/2016\/01\/05\/462065762\/troubles-are-up-in-the-middle-east-but-oil-prices-are-down-huh?utm_medium=RSS&utm_campaign=business<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

\"Prices,<\/a><\/div>\n
\n
<\/div>\n
\n
\n

Prices, as seen at a gas station in Woodbridge, Va., on Tuesday, are 21 cents a gallon cheaper than this time last year. The drop violates the historic rule that tension such as that currently between key producers Saudi Arabia and Iran causes the cost of a barrel of oil to rise. Saul Loeb\/AFP\/Getty Images<\/strong> hide caption<\/strong><\/p>\n<\/div>\n

toggle caption<\/strong> Saul Loeb\/AFP\/Getty Images<\/span><\/div>\n<\/div>\n

Oh, the irony.<\/p>\n

Historically, when political tensions increased in the Middle East, the price of oil rose too. Buyers of oil worried that conflicts could interrupt drilling or interfere with oil-tanker access to waterways. In theory, when risks rise, so do prices.<\/p>\n

But in recent days, even as tensions have been growing between two key oil producing nations \u2014 Iran and Saudi Arabia \u2014 oil prices have been falling. They slipped below $36 a barrel on Tuesday.<\/p>\n

Why?<\/p>\n

Experts explain it this way: The two countries are both in OPEC<\/a> but now are on such bad terms that they’d be unlikely to agree on anything \u2014 including a plan to reduce drilling. OPEC members are supposed to reach a consensus before changing production policies, and right now, the OPEC policy is to maintain existing high levels of pumping.<\/p>\n

“If they can’t agree on an output level and some way to control prices, then everybody will just keep all-out pumping and try to raise as much money as possible for their countries,” said Daniel Katzenberg, senior energy analyst at Robert W. Baird & Co.<\/p>\n

And there’s another big reason for the low global oil prices: America’s abundant supplies.<\/p>\n

On Tuesday, American Petroleum Institute President Jack Gerard, after delivering his annual State of American Energy address<\/a>, told reporters that low oil prices reflect the new U.S. role in energy markets.<\/p>\n

These days, even when Middle Eastern supplies face possible disruptions, oil buyers don’t panic; they know U.S. producers can fill any supply gaps, he said.<\/p>\n

“The geopolitics of energy has changed significantly over the last decade,” Gerard said. “The United States is now the world’s No. 1 producer of oil and natural gas.”<\/p>\n

Those U.S. oil supplies are “taking out a lot of the risk that we have seen historically” in OPEC-dominated energy markets, he said.<\/p>\n

“Our production in the United States today is around 9 million barrels a day; that’s almost doubled over the last five or six years,” Gerard said. “So the global market today is very different.”<\/p>\n

All of that is good for U.S. consumers, he said, noting that the U.S. Energy Information Administration says the average U.S. household saved nearly $700 on cheaper gasoline last year, compared with 2014.<\/p>\n

And 2016 may be even better for household budgets. The nationwide average price<\/a> for a gallon of regular is now $1.99, according to AAA, the auto club. That’s 21 cents cheaper than a year ago.<\/p>\n

NPR correspondent John Ydstie contributed to this report.<\/em><\/p>\n

This entry passed through the Full-Text RSS service – if this is your content and you’re reading it on someone else’s site, please read the FAQ at fivefilters.org\/content-only\/faq.php#publishers.<\/em><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[],"class_list":["post-6184","post","type-post","status-publish","format-standard","hentry","category-business-2"],"_links":{"self":[{"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/posts\/6184","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/comments?post=6184"}],"version-history":[{"count":0,"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/posts\/6184\/revisions"}],"wp:attachment":[{"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/media?parent=6184"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/categories?post=6184"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/tags?post=6184"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}