Some OPEC nations increase oil production in response to higher gas prices 

Gas prices in the U.S. have risen roughly 34 cents a gallon since the rebellion in Libya began. And while President Obama has refused access to some of the most oil rich areas available to the United States, most notably in the Gulf Region, and offered up temporary solutions such as dipping into the Strategic Petroleum Reserve, other nations have been responding to the added market incentive by increasing oil production.

Saudi Arabia had increased their production almost from the beginning in order to try and capture some of the market that Libya had given up, and now it seems that several other influential members of OPEC are also ready to cash in. Kuwait, the United Arab Emirates and Nigeria have all made moves that would increase their total production by about 300,000 barrels a day. Saudi Arabia has already increased their production by close to 700,000 barrels a day.

 The International Energy Agency estimates that Libya is still producing 580,000 barrels of oil a day, down from the 1.58 million before the fighting began. The added production by the OPEC nations returns oil production to approximately what it was before Libya started their protests.

This is not to say that the U.S. still shouldn't be worried about continuing oil shocks in the world market.

Several attempts to organize protests are currently going on in Saudi Arabia despite the countries strict ban on unauthorized protests. The continuing escalation of the conflict in Libya could also curtail the oil production that is still currently running there as well. Also, other OPEC nations such as Iran and Algeria are actively opposed to any efforts to increase oil production, and there remains the possibility; however small, of nations cutting overall production in an attempt to keep prices high.

Even though the Unites States receives most of its oil production from Canada, Mexico and sources inside the U.S., any decrease in supply of oil overall would drive up the prices worldwide as buyers start to look for new sources.

Instead of letting these supply shocks dictate price increases in America, why not drill here? A recent report by the Congressional Research Service has stated that America's combined recoverable natural gas, oil, and coal endowment remains the largest on Earth.

Instead of allowing other nations to cash in and sell energy to us, why aren't we cashing in and selling to them?

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Staff Report

Staff Report

A daily newspaper covering San Francisco, San Mateo County and serving Alameda, Marin and Santa Clara counties.
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