US gas prices poised for sharp spike as OPEC+ cuts oil production, fueling inflation fears.
In a surprise move, the Organization of the Petroleum Exporting Countries (OPEC+) has announced a significant reduction in oil production, which is expected to send shockwaves through global energy markets and impact US gas prices. The cut, valued at over 1.6 million barrels per day, will take effect starting May and continue until the end of the year.
According to Tom Kloza, global head of energy analysis for OPIS, a tracking service for AAA, this move could "reawaken the inflation monster" in the US economy. The White House is likely to be shocked by the news, as it may alter the calculus on interest rates and fuel prices. With the national average gas price currently at $3.51 per gallon, Kloza predicts prices could reach up to $3.80 to $3.90 in a relatively short period.
Industry experts note that while the US has a strategic petroleum reserve (SPR) that can be released to stabilize markets, even this safety net may not fully mitigate the impact of OPEC's production cut. The SPR played a significant role in bringing down prices last year after Russia's invasion of Ukraine disrupted global energy supplies.
Kloza also points out that US oil production and refining capacity have increased since then, which should help offset some of the effects of the reduced oil supply. However, he emphasizes that a 1 million barrel-per-day reduction is not an easy cut to make up for.
The average gas price in the US was around $4.19 per gallon last year when Russia invaded Ukraine and global energy markets were disrupted. Prices eventually reached a record high of $5.02 per gallon on June 14, but then began to decline steadily over several months as supply concerns subsided. Now, with OPEC's move, gas prices could potentially return closer to those levels.
With the potential for hurricane-related disruptions along the Gulf Coast this summer, US drivers may face higher gas prices than they have in recent months.
In a surprise move, the Organization of the Petroleum Exporting Countries (OPEC+) has announced a significant reduction in oil production, which is expected to send shockwaves through global energy markets and impact US gas prices. The cut, valued at over 1.6 million barrels per day, will take effect starting May and continue until the end of the year.
According to Tom Kloza, global head of energy analysis for OPIS, a tracking service for AAA, this move could "reawaken the inflation monster" in the US economy. The White House is likely to be shocked by the news, as it may alter the calculus on interest rates and fuel prices. With the national average gas price currently at $3.51 per gallon, Kloza predicts prices could reach up to $3.80 to $3.90 in a relatively short period.
Industry experts note that while the US has a strategic petroleum reserve (SPR) that can be released to stabilize markets, even this safety net may not fully mitigate the impact of OPEC's production cut. The SPR played a significant role in bringing down prices last year after Russia's invasion of Ukraine disrupted global energy supplies.
Kloza also points out that US oil production and refining capacity have increased since then, which should help offset some of the effects of the reduced oil supply. However, he emphasizes that a 1 million barrel-per-day reduction is not an easy cut to make up for.
The average gas price in the US was around $4.19 per gallon last year when Russia invaded Ukraine and global energy markets were disrupted. Prices eventually reached a record high of $5.02 per gallon on June 14, but then began to decline steadily over several months as supply concerns subsided. Now, with OPEC's move, gas prices could potentially return closer to those levels.
With the potential for hurricane-related disruptions along the Gulf Coast this summer, US drivers may face higher gas prices than they have in recent months.
... I'm like "yaaas, my wallet hates me already" 
. Seriously though, a 1.6 million barrel-per-day reduction is huge and could definitely send prices soaring 
. It's ironic that with more domestic production, we're still reliant on global supply chains. What if there was a way to boost our own production faster? 
We need to focus on renewable energy sources ASAP to reduce our dependence on fossil fuels 
.
. It's also concerning that US drivers are bracing themselves for hurricane-related price spikes 
. As someone who prioritizes mindfulness, I wish we could find more harmony with nature and just live with uncertainty 
.
Oh man, I'm getting a bit worried about the upcoming surge in gas prices. Like, who needs that kind of financial stress? 
As an avid traveler, I try to plan my trips during off-seasons or use public transport when possible. But for those who can't avoid driving around, this could be a real challenge.
It's like, we already saw what happened last year during the Ukraine crisis... 
And with interest rates already on the rise, this could be the final nail in the coffin for people's wallets. Not to mention, hurricane season is just around the corner, which means more potential disruptions and even higher prices.
Oh man, I'm thinking of selling my car right now 
, so I'm starting to think of making some big changes in my daily life... maybe ditching the car or finding ways to reduce my gas consumption 
. This OPEC+ move is definitely going to make things interesting 
the white house is gonna be like "what do we do now?" 
still, it's not looking good for our pockets this summer... hurricane season and all... let's just hope we can ride out the storm 