You may have noticed that gas prices have fallen about 33% since the beginning of the year. Nationwide the average price of regular unleaded gasoline was $1.65. In Illinois the average price is $1.83 and in Chicago the Average is at $2.00.
Ever since the US has been fracking to produce more oil from our sources, there has been over production world-wide. 2019 world oil demand was 100.75 million barrels a day (mb/d). Production was slightly above demand, keeping pressure on prices.
In the beginning of 2020, world oil demand began to drop due to the coronavirus in China. OPEC and other oil producing counties (OPEC+) met to attempt to cut production in order to prop up prices. Russia refused to accept the production cuts that Saudi Arabia proposed so the talks fell apart and a price war ensued.
After the coronavirus hit the rest of the industrialized nations and 40% of the world population was advised to stay at home, demand has dropped by 19 mb/d.
President Trump has been working with the Saudis and the Russians to get a deal together to stabilize oil prices. Over the weekend, OPEC+ has been able to put together a deal to cut oil production by 9.7 mb/d starting on May 1. The US has actually taken on production cuts in order to help make the OPEC+ deal. There will still be over production. Excess storage capacity is projected to run out in May.
So my question is, who is trump working for? I prefer low cost oil. I personally am not affected by oil prices because I drive a car that gets 40 mpg and I only drive about 12 miles a day, basically from Evanston to Skokie.
Fuel prices do affect where I work though. I am a Fleet Manager. At the place that I work at, we have 45 heavy-duty vans and pickups. The vehicles average about 13 mpg. They average about 35 miles per day. That is over 120 gallons of fuel per day. The savings to the company from the difference in the cost of gasoline from the beginning of the year to the price in the beginning of April is $112.80 a day, $789.60 a week, $3378.00 a month, and $41k a year. That is quite a savings.
It seems that trump is really concerned about how the drop in oil prices will affect the oil producers and the oil patch economies. The reason for his concern is that the oil industry are major donors to trump and to the Republican party. Over $100 million in campaign contributions in the 2016 Presidential election. $9 million just from Koch Industries.
Trump is not looking out for the regular people. He is looking out for the people that bought him.