OPEC+ Steps Up the Heat on US Gas Prices, Sending Inflation Expectations Soaring.
In a surprise move, the Organization of the Petroleum Exporting Countries (OPEC) and its allies announced a production cut of over 1.6 million barrels per day, starting in May, and running through the end of the year. The news has sent shockwaves through global energy markets, causing oil prices to surge by about 6% on Monday.
The impact of this move will be felt at US gas pumps sooner rather than later, with gasoline futures already up by around 8 cents per gallon, or about 3%, in morning trading. This means that Americans can expect their gas prices to rise significantly in the coming weeks and months, potentially reaching levels above $3.80 to $3.90 per gallon.
Energy analysts are warning that this move could reignite inflation concerns, with Tom Kloza, global head of energy analysis for OPIS, stating that "I think OPEC is reawakening the inflation monster." The White House has been caught off guard by this move, which will undoubtedly alter the economic calculus and send shockwaves through the industry.
According to AAA, the national average for US gas prices stood at $3.51 on Monday, but Kloza predicts that it could rise to $3.80 to $3.90 in relatively short order due to the reduced oil production. While some analysts are warning against a repeat of 2022's record-high prices of around $5 per gallon, others believe that prices may reach as high as $4 per gallon.
The US Strategic Petroleum Reserve has played a crucial role in reducing gas prices in recent months, but with OPEC+ cutting production, this buffer is being eroded. The impact of the pandemic and Russia's invasion of Ukraine led to record-high prices last year, which eventually fell due to concerns about a global recession and increased oil releases from the SPR.
However, despite this volatility, Kloza notes that one factor keeping gas prices relatively stable is the US plans for additional SPR releases, as well as increased oil production and refining capacity. Nonetheless, with OPEC+ cutting production by 1 million barrels per day, it will be a challenge to offset these losses, leading analysts to warn of a potential price spike.
In a surprise move, the Organization of the Petroleum Exporting Countries (OPEC) and its allies announced a production cut of over 1.6 million barrels per day, starting in May, and running through the end of the year. The news has sent shockwaves through global energy markets, causing oil prices to surge by about 6% on Monday.
The impact of this move will be felt at US gas pumps sooner rather than later, with gasoline futures already up by around 8 cents per gallon, or about 3%, in morning trading. This means that Americans can expect their gas prices to rise significantly in the coming weeks and months, potentially reaching levels above $3.80 to $3.90 per gallon.
Energy analysts are warning that this move could reignite inflation concerns, with Tom Kloza, global head of energy analysis for OPIS, stating that "I think OPEC is reawakening the inflation monster." The White House has been caught off guard by this move, which will undoubtedly alter the economic calculus and send shockwaves through the industry.
According to AAA, the national average for US gas prices stood at $3.51 on Monday, but Kloza predicts that it could rise to $3.80 to $3.90 in relatively short order due to the reduced oil production. While some analysts are warning against a repeat of 2022's record-high prices of around $5 per gallon, others believe that prices may reach as high as $4 per gallon.
The US Strategic Petroleum Reserve has played a crucial role in reducing gas prices in recent months, but with OPEC+ cutting production, this buffer is being eroded. The impact of the pandemic and Russia's invasion of Ukraine led to record-high prices last year, which eventually fell due to concerns about a global recession and increased oil releases from the SPR.
However, despite this volatility, Kloza notes that one factor keeping gas prices relatively stable is the US plans for additional SPR releases, as well as increased oil production and refining capacity. Nonetheless, with OPEC+ cutting production by 1 million barrels per day, it will be a challenge to offset these losses, leading analysts to warn of a potential price spike.
just saw the latest news about OPEC+ cutting production 
this is gonna send US gas prices SOARING 
like, we're already seeing a 6% jump in oil prices on Monday and it's only May 
I'm talking $3.80 to $3.90 per gallon?!?! That's crazy talk 
anyone else thinking they'll be breaking the bank at the pump soon? 
! They're already killing me 
. OPEC's move is like a big ol' bucket of ice water 
poured on my wallet 
. Like, I get it, they gotta make a buck 
, but can't we just find alternative energy sources 
? Or like, invest in some fancy new tech that makes gas prices plummet 
? This OPEC thing is so old school 
. And don't even get me started on inflation worries 
.
and deal with the price hike. At least we can all commiserate about how broke we are 
.
... said no one ever. Seriously though, this is gonna make life expensive for Americans, especially if those $3.80 to $3.90 per gallon prices become a reality. 
. On the bright side, it'll be good for oil companies' bottom lines... because who doesn't love making bank off people's pain 
. Guess we're gonna see some inflation monster vibes 
soon enough 
)
still can’t believe how quickly things went from bad to worse in such a short period of time. guess we’ll just have to tighten our belts and hope for the best 
. Plus, think of all the extra cash Americans will have to splurge on avocado toast and Tesla Model S's 
. The White House might be caught off guard, but I say, "Bring it on!" 
.
they're like "hey, we're gonna cut oil production and watch those US gas prices skyrocket!" 
like, can't we all just get along... and pay more for gas? 
. And what's with OPEC+ cutting production? Don't they know we need more oil right now? 
This is going to hurt a lot of people, especially those who rely on cars for work or other stuff 
. I hope the government can do something to help 
.
.
. My wallet is already stressing about it 
. So, yeah, I'm expecting prices to hit around $4-5 per gallon by the summer... not great timing, considering the heat and all 
. But on the bright side, this could actually give the US a chance to boost its oil refining capacity and maybe even make some new, more efficient oil technologies 
. More oil released = more money in gas pumps. I'm just waiting for the rest of my paycheck to go towards filling up my tank 
and I'm literally drooling just thinking about it... anyway, back to gas prices, right? I mean, can you believe OPEC+ is going all in on reducing production? It's like they're trying to give Elon Musk a run for his money with Tesla's electric cars. And speaking of cars, have you seen those new electric vehicles that just came out this year? So sleek and futuristic, I might just have to treat myself to one soon...
.