Stock up next week: gas 3 gasoline could be around the corner – unless OPEC and Russia start pumping more oil

US crude has reached above 60 60 a barrel. For the first time in history, oil has plunged below zero (negative. 3 40.32 a barrel, for sure). Prices at the pump are even higher. According to the AAA, the national average on Friday hit 2.70 a gallon. That’s better than the April low of 76 1.76 per gallon.

Against this backdrop, OPEC and its allies, known as OPEC +, are due to meet on Thursday to consider whether to add more barrels to the hungry market. They’ve definitely got firepower, and price incentives to do.

Last year, OPEC + cut output by a record-shattering 9.7 million barrels a day. U.S. And emergency measures, along with declines produced by other manufacturers, sent prices soaring. This recovery has accelerated in recent months as millions of people around the world have been vaccinated against covid.

OPEC + may soon announce that the market is now healthy enough to increase production this spring.

“Given the lure of higher prices, there should be more supply in the market,” said RJ Fitzmurrise, Rabobank’s energy strategist.

“Given where the prices are, how can anyone tell Russia that they need to reduce production?” Said Jim Mitchell, head of U.S. oil analysts at Refinitive.

There are many good reasons for OPEC + to release more barrels.

First, higher prices mean countries like Saudi Arabia that rely on oil to balance their budgets can bring in much-needed revenue.

Bank of America strategists told customers in a recent note that OPEC + would soon “save market share” by pumping. During the second quarter alone, Bank of America expects OPEC + supply to add more than 1.3 million barrels per day.

There’s another reason why OPEC + will want to act before it’s too late: self-defense.

If gasoline prices continue to rise and hit a 3 gallon hit – it will only boost clean energy investment and persuade more drivers to dump their gas-goozing SUVs for electric vehicles.

“If the oil goes to extremes,” said Fitzurrise of Rabobank, “it just helps the renewable story and eats up the demand for oil.”

Going on electric means more expensive recalls

Numbers: The recall will cost Hyundai 1 trillion Korean wins or or 900 million. On a per-vehicle basis, the average cost is 11,000, 000 – an astronomically high number for the recall.

This episode hints at how electric car defects can cause huge costs for auto toe manufacturers – at least in the near future, report to my colleagues Chris Isidore and Peter Valdes-Dapena.

The recall is another indication of how expensive an EV battery is related to the price of the entire car. Until the cost of batteries comes down, due to the mass production and scale economy around the world, the cost of building electric vehicles will be higher than comparable gasoline cars.

Once batteries become less expensive, as expected in the coming years, electric cars can be much cheaper to build because they have fewer parts to run on and require 30% fewer hours of labor to assemble than conventional vehicles.

Fewer parts of electric vehicles may also mean fewer auto toe recalls in the future. But for now, there can be significant costs if battery replacement is needed for battery fire problems.

Now the next

Monday: US ISM Manufacturing Index

On tuesday: Target, Kohls, Auto Tozone, AMC Entertainment and HP Enterprise Earnings

Wednesday: US ISM Non-Manufacturing Index; EIA crude oil inventories; Earnings of the larval tree, stalantis and American eagle

Thursday: OPEC + meeting; U.S. Unemployment claims; Earnings from Kroger, Gap and Costco

Friday: U.S. Job report for February; Big earnings