Oil cuts could push gas prices back up

TRANSCRIPT

NIALA: Good morning! Welcome to Axios Today!

It’s Thursday, October 6th.

I’m Niala Boodhoo.

Here’s what we’re watching today: American drivers are getting more loyal to electric vehicles. Plus, long COVID affects the daily lives of almost 20 million U.S. adults.

But first, oil production cuts could push our gas prices back up. That’s today’s One Big Thing.

NIALA: OPEC+ the Coalition of Oil Producing Nations led by Russia and Saudi Arabia announced yesterday. It's planning to cut oil production by 2 million barrels per day, starting in November. This is the potential to push up gas prices in the US and around the world. Crude oil prices had fallen to roughly $80 a barrel for more than120 in early June. Yesterday, the Benchmark domestic crude futures, West Texas Intermediate, traded at nearly $88 a barrel.

Axios Energy reporter, Ben Geman, has been covering the story and is here with what to watch. Ben, why is OPEC+ making this move?

BEN GEMAN: What they're looking to do is sort of, set something of a floor underneath global oil prices. Right. You know, prices have been coming down, and what I think they're trying to do is sort of set some guardrails there, or at least arrest the slide and ideally see them a bit higher. You know, I think that headline number of 2 million barrels it's not gonna be actually quite that much that comes off the market. You've had a bunch of members of OPEC producing below their quotas. So really, you know, I've seen analysts saying, okay, what this is gonna mean on the ground is say, 800,000 to a million barrels a day coming off the market. But you know, that's still pretty significant. And as we've seen in the last few days, it is definitely moving markets.

NIALA: Ben. So that's crude oil prices. How does that translate to higher prices at the pump?

BEN: Crude oil prices are the biggest factor behind gasoline prices, certainly not the only one. If this price gain in recent days is maintained and perhaps goes up even a little bit more, I think we can generally see US gasoline prices go back up again. They've generally been trending a little bit higher already, but they're so much lower than they were a few months ago. One analyst, from a respected outfit called GasBuddy that I was paying attention to, he sees price average US gasoline prices as a result of this OPEC+ action going up maybe another 15 to 30 cents per gallon on average. So that's, you know, that's hardly nothing. It won't get us back anywhere near the highs that we saw some months ago, but it's gonna be likely a real increase.

NIALA: What is the White House saying about this?

BEN: So the White House has condemned what OPEC+ did in pretty strong terms. I think we could see some additional releases from the strategic petroleum reserve beyond what's already been ongoing, but they've already put a lot of oil out from that. I think Congress will take at least some type of, make some symbolic statements about this. You know, there has been this idea that's in the bloodstream, a little bit of perhaps the White House and the energy department trying to take some steps to restrict the US export of gasoline and other refined products to sort of keep supplies more robust here. There's a lot of industry pushback to that idea. I would be a little surprised if that happened, but, these are these are strange times.

NIALA: So you said that OPEC is doing this to set a floor for oil prices. Are there political reasons why OPEC+ is taking this action?

BEN: So I think there's a lot of reasons at play. You know, I've seen some discussion of the idea that Russia is also also keen to maximize its revenues as they proceed with this war against Ukraine. But the biggest factor, I would say, is an effort by the cartel to sort of seize control of the direction of the market. You know, prices had been coming down, down, down for a while and this really helps them prop those prices up. They might go a little bit higher still, but they've at the very least, you know, kind of arrested the slide and thrown their weight around here.

NIALA: Axios’ Energy Reporter Ben Geman. Thanks Ben!

BEN: Thanks so much for having me on.

In a moment: more and more Americans are sticking with electric vehicles.

[AD SPOT]

American drivers are getting more loyal to electric vehicles

NIALA: Welcome back to Axios Today. I'm Niala Boodhoo.

EVs are becoming more popular. Sales have roughly doubled from a year ago, and it turns out most electric car owners tend to buy in EV for their next car too, according to US vehicle registration data. Axios’ Joanne Muller is here to explain why that's such a big deal.She covers the future of transportation from Detroit. Hi Joanne.

JOANNE MULLER: Hi, Niala.

NIALA: So about two-thirds of EV owning households that bought a new car in 2022, got another electric. Joanne, why is that such a significant statistic?

JOANNE: Really Niala what that shows us is that the public is really beginning to embrace electric cars. And, you know, this bodes well for the future as we, you know, think about the fact that the government's putting a ton of money and car makers as well into EV production in this country, and also into battery supply chains and things like that.

NIALA: People might be surprised by this stat because there are still pretty big infrastructure gaps that make it inconvenient to drive long distances with an electric vehicle.

JOANNE: Well, that's true. What we're seeing now is the federal government is beginning to roll out a ton of money for states to install fast chargers along their major highways and corridors, and that should give people a little bit more peace of mind if they're going to set out on alonger trip in an EV. But the fact of the matter is most people drive their car relatively close to home, and an EV works out for a lot of people.

NIALA: So even though this data shows how people who drive EVs love them, it's important to point out, they still make up less than 6% of all registered cars. What is it gonna take to make EVs more widespread?

JOANNE: Well, it's gonna take more time. It's going to take more models to choose from. I mean, Tesla really dominates this market right now. But, if you look at the product pipelines for other automakers, there are a ton of new cars coming that will be powered by batteries, not gasoline, so there's gonna be a lot more to choose from and in price points that matter to everybody.

NIALA: Joanne Muller covers the future of transportation for Axios from Detroit. Thanks, Joanne.

JOANNE: Thanks Niala.

Long COVID affects the daily lives of almost 20 million U.S. adults

NIALA: We're almost three years into the covid pandemic, and most people are finding some kind of new normal, but for the almost 24 million Americans suffering from long covid, the pandemic is far from over. In fact, more than 80% reports still having trouble carrying out daily activities because of their symptoms.

That's according to CDC data released yesterday. Axios’ Sabrina Moreno is here for the latest on long covid. Hi Sabrina.

SABRINA MORENO : Hi. Thank you for having me

NIALA: Sabrina, so what kind of symptoms are people who have long covid still suffering with?

SABRINA: One of the most common kind of mirrors, chronic fatigue and kind of that exhaustion, after doing even the most basic of efforts. Some people report chest pain, but it really does vary. There are still some folks who can't smell, can't taste, and that can also have a mental health impact. So there's also the depression and anxiety that can come with it.

NIALA: The CDC released this data yesterday. What's the federal government's approach?

SABRINA: I think if you were to talk to advocates and people who are experiencing long covid, their response might be that there isn't much being done on the federal level and that there have kind of been left to fend for themselves and figure it out. I think it's important to keep in mind that this is affecting millions of people. There's also more than one in four adults, with long covid who are, reporting severe limitations in their day to day and that number jumps closer to 40% for people who are Black, Latino, or disabled. And those were three groups that really shouldered the burden of the pandemic and the disparities that led to certain groups being among the most affected are also kind of at play here when we're talking about long covid.

NIALA: Axios’ Sabrina Moreno. Thank you, Sabrina.

SABRINA: Thank you.

NIALA: One last thing before we go today: you know we often do weekly politics wraps on Fridays on the show – well we’ll be bringing in some of Axios’ very best political thinkers like Mike Allen and Margaret Talev every Friday from now to election days… We’re calling it State of Play…and we’d love to hear what you’re thinking about the midterms as we get closer. We may put your questions – and observations – to our experts. Please send me a voicememo with a brief question or comment to (202) 918-4893.

I’m Niala Boodhoo - thanks for listening - stay safe and we’ll see you back here tomorrow morning.

NIALA: The day that Richard Nixon gave a speech about his dog. The time that a war broke out over a pig farm. The very first time that a district got gerrymandered. Check out This Day In Esoteric Political History from Radiotopia. Short, fun episodes, three times a week, with surprising stories from our political past, and how they connect to our current moment. Get it wherever you listen to podcasts