OPEC+ Takes a Step Backwards on Oil Production, Sending Gas Prices Soaring in the US
In a surprise move, the Organization of the Petroleum Exporting Countries (OPEC) and its allies announced Sunday that they will cut oil production by over 1.6 million barrels per day starting in May. This decision has sent shockwaves through the global energy market, with Brent crude futures and WTI, the US benchmark, surging up about 6% in trading on Monday.
As a result, gasoline futures have also skyrocketed, leading to an expected increase in gas prices at US pumps. The national average for US gas prices stands at $3.51, according to AAA, with energy analyst Tom Kloza predicting that it could reach as high as $3.80 to $3.90 in the near future.
Kloza attributes the sudden spike in oil prices to OPEC's move, warning that this will "awaken the inflation monster." He believes that the White House is "major-time pissed" over the decision and that it will have a significant impact on US drivers' wallets. The analyst also notes that the average US regular gas price was just below $3.53 on February 23, 2022, when Russia's invasion of Ukraine led to record-high prices.
However, Kloza suggests that there are some mitigating factors at play. The US plans to release additional oil from its Strategic Petroleum Reserve (SPR), and domestic oil production and refining capacity have both increased since the invasion. Nevertheless, the cut in oil production by OPEC+ is a significant challenge for US drivers, and it remains to be seen whether prices will rise above $4 per gallon.
As for when gas prices might return to pre-pandemic levels or even those of 2022, Kloza is skeptical. He believes that by the end of the summer, US drivers could see prices rise again, especially if a hurricane or other storms affect production along the Gulf Coast. For now, it seems that the price of gas will remain volatile and susceptible to global events.
In a surprise move, the Organization of the Petroleum Exporting Countries (OPEC) and its allies announced Sunday that they will cut oil production by over 1.6 million barrels per day starting in May. This decision has sent shockwaves through the global energy market, with Brent crude futures and WTI, the US benchmark, surging up about 6% in trading on Monday.
As a result, gasoline futures have also skyrocketed, leading to an expected increase in gas prices at US pumps. The national average for US gas prices stands at $3.51, according to AAA, with energy analyst Tom Kloza predicting that it could reach as high as $3.80 to $3.90 in the near future.
Kloza attributes the sudden spike in oil prices to OPEC's move, warning that this will "awaken the inflation monster." He believes that the White House is "major-time pissed" over the decision and that it will have a significant impact on US drivers' wallets. The analyst also notes that the average US regular gas price was just below $3.53 on February 23, 2022, when Russia's invasion of Ukraine led to record-high prices.
However, Kloza suggests that there are some mitigating factors at play. The US plans to release additional oil from its Strategic Petroleum Reserve (SPR), and domestic oil production and refining capacity have both increased since the invasion. Nevertheless, the cut in oil production by OPEC+ is a significant challenge for US drivers, and it remains to be seen whether prices will rise above $4 per gallon.
As for when gas prices might return to pre-pandemic levels or even those of 2022, Kloza is skeptical. He believes that by the end of the summer, US drivers could see prices rise again, especially if a hurricane or other storms affect production along the Gulf Coast. For now, it seems that the price of gas will remain volatile and susceptible to global events.
1.6 million barrels less oil per day from OPEC+ is a big deal 
and we're already seeing prices skyrocket on the US market... i was hoping we'd be done with record-highs by now 
. Kloza's right, though - inflation monster alert! 
and the White House isn't happy about it 
.
... we'll see how it plays out, though!
OPEC's decision to cut oil production is like throwing a wrench into the energy market. Gas prices are already pretty high, and now they're gonna get even more outta control? 
the us government's response should be more than just "oh well" 
, there's got to be a plan in place to cushion the blow for regular folks... hope the economy can handle this volatility 
can you believe this?! OPEC is literally killing us with those oil cuts! 
My kid's school bus ride just cost me an extra 50 cents a week already, I don't know how much more they're gonna take from our pockets... 
and now it's gonna be $4+ per gallon? that's just insane 
. I'm all for conservation and whatnot but this feels like such a bad time to hit us with the price hike 
. I mean, who benefits from higher gas prices? Not the US drivers, that's for sure 
.
!
, gas prices are already killing me with my student loan payments and groceries on top of that? this new info is not what we need... like when russia invaded ukraine gas prices skyrocketed and it was a nightmare for everyone 
I mean we're talkin' $3.51 a gallon now, but Kloza says it could go up to $3.80 to $3.90 
The White House might be getting a bit testy about this too 
. But hey, at least we have our SPR to cushion the blow 
. I'm not counting on prices going back down anytime soon, though 
. Can't predict the market, but one thing's for sure: we're in for a bumpy ride 
!
. What's the real reason behind this decision? Anyone got a source on that? 
. And Kloza's right, it's not just about the gas prices, it's also about inflation 
Maybe we should invest in some of that too 
. I mean, 1.6 million barrels per day is a big cut, especially when we're already dealing with supply chain issues and whatnot. And now gas prices are gonna go through the roof? $3.80-$3.90?! That's just cruel 
oh noooo! 
️ and my wallet is already hurting 
what about hurricane season? 
but domestic production and refining capacity are on the rise 
.
. OPEC+ cutting back on oil production might seem like a good thing, but it just shows us how fragile the whole system is 
.
