Jeff Rubin, the former chief economist for CIBC World Markets, says the U.S. can't rely on OPEC because its member states are guzzling down their own oil.
“OPEC, together with two non-cartel oil producers, Russia and Mexico, consumes 14.5 million barrels of oil per day,” Rubin writes in The Globe and Mail.
“That’s nearly twice as much as China, in case anybody is keeping track.”
Oil demand among OPEC members has been growing at well over double the world average, Rubin notes.
And the more these countries consume their own oil, the less they have to export.
The Saudis burn oil at the equivalent of seven cents a gallon to create the power to drive their desalination plants and power plants, Rubin says.
And just like the 25 cents per gallon gasoline prices in Caracas, those rates don’t change, whether world oil prices are $20 per barrel or $147 per barrel, he observes.
“Fortunately, since oil prices are almost four times higher than they were a decade ago, those states can afford to export less because they get that much more for every barrel they do,” Rubin says.
Retail gas prices have been slipping gradually for weeks, courtesy of the recent fall in oil prices.
“It couldn’t be more timely; it’s welcome news,” Brian Bethune, chief United States financial economist for IHS Global Insight, old The New York Times.
“The recent drop in gasoline prices has clearly contributed to an overall improvement in consumer confidence and right now that looks like it could build over the month.”
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