OPEC announced late last week that they were planning on cutting oil production by 1.2 million barrels per day in hopes to keep costs of crude at about $60 per barrel. This cut is intended to bring the cost of gasoline up a bit but to keep it low enough so as to be more attractive than alternative fuel pricing.
“It’s unfortunate that OPEC feels that they can control the vision of this country and the destiny relative to alternative fuels,” exclaimed Curtis Donaldson, Chairman of the National Ethanol Vehicle Coalition.
OPEC expects to keep the price of gasoline at about $2.25 per gallon. According to a Foxnews.com news story on October 20 (which can be found by clicking here), “OPEC's cut also signaled that it would defend a price of about $60 a barrel, high enough to justify its investment in future production capacity but low enough to allow economic growth and deter a flood of alternative fuels.”
U.S. oil prices set a record high in July of this year topping at $78.40 a barrel and averaging record high fuel costs. Alternative fuel pricing, including E85, tended to be much lower during the summer, thus making them more attractive to consumers.
“OPEC feels that they can manage the price of gasoline to a point where increasing the production of E85 and providing it at more locations across the country will become less attractive. It will be disappointing if we allow this to happen when everyone knows, now more than ever, we need more energy independence,” added Donaldson.
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