OPEC+ announces surprise oil production cuts, poised to send US gas prices soaring.
In a move that is likely to reignite inflation concerns, the OPEC+ alliance has agreed to slash its oil production by over 1.6 million barrels per day starting in May. The decision, which was made on Sunday, sent Brent crude futures and WTI prices surging by around 6% in trading on Monday.
The expected impact of this move will be felt at US gas pumps, where prices are set to rise by approximately 3-4 cents per gallon, according to industry trackers. This uptick is largely driven by the reduced oil supply, which will lead to higher costs for refiners and ultimately result in increased fuel prices for consumers.
Tom Kloza, global head of energy analysis for OPIS, a leading gas price tracker, predicts that US drivers could see their average gasoline price reach $3.80-3.90 per gallon "in relatively short order" due to the OPEC+ production cuts. This would be a significant increase from the current national average of $3.51.
Kloza believes that prices are unlikely to spike as high as they did in 2022, when US gas prices reached record levels of over $5 per gallon following Russia's invasion of Ukraine and subsequent disruptions to global energy markets. However, he notes that a hurricane or other storms affecting production along the Gulf Coast could push prices even higher by the end of summer.
While OPEC+ does have the ability to cut oil production, Kloza acknowledges that it will be challenging for them to offset the losses caused by their current reduction. The US Strategic Petroleum Reserve's planned releases and increased domestic oil production are seen as key factors that have kept prices under control thus far. Nevertheless, the prospect of reduced supply is set to fuel inflation concerns, with prices potentially surging back towards $4 per gallon or higher in the near future.
In a move that is likely to reignite inflation concerns, the OPEC+ alliance has agreed to slash its oil production by over 1.6 million barrels per day starting in May. The decision, which was made on Sunday, sent Brent crude futures and WTI prices surging by around 6% in trading on Monday.
The expected impact of this move will be felt at US gas pumps, where prices are set to rise by approximately 3-4 cents per gallon, according to industry trackers. This uptick is largely driven by the reduced oil supply, which will lead to higher costs for refiners and ultimately result in increased fuel prices for consumers.
Tom Kloza, global head of energy analysis for OPIS, a leading gas price tracker, predicts that US drivers could see their average gasoline price reach $3.80-3.90 per gallon "in relatively short order" due to the OPEC+ production cuts. This would be a significant increase from the current national average of $3.51.
Kloza believes that prices are unlikely to spike as high as they did in 2022, when US gas prices reached record levels of over $5 per gallon following Russia's invasion of Ukraine and subsequent disruptions to global energy markets. However, he notes that a hurricane or other storms affecting production along the Gulf Coast could push prices even higher by the end of summer.
While OPEC+ does have the ability to cut oil production, Kloza acknowledges that it will be challenging for them to offset the losses caused by their current reduction. The US Strategic Petroleum Reserve's planned releases and increased domestic oil production are seen as key factors that have kept prices under control thus far. Nevertheless, the prospect of reduced supply is set to fuel inflation concerns, with prices potentially surging back towards $4 per gallon or higher in the near future.
, OPEC+ is really gonna make a dent on our wallets... 1.6 million barrels less oil = 3-4 cents more gas every gal... can't say I'm thrilled about it 
, but hey at least they're trying to keep the global oil supply in check, right? 
meanwhile, my local gas station is still asking for $5 a gallon 
, guess that's the life of a west coaster...
.
Either way, I'm not holding my breath...
I swear, every time it goes up, my budget gets like "what do I even do now?" 
Not good news for us US drivers! 
Gas prices are gonna skyrocket 
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I'm thinking $3.80-$3.90 per gallon is a bit steep 
If there's a hurricane or storm, it'll be game over for our wallets 
still hoping that green energy will be able to keep up with demand and not just push prices back up 
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. And with prices potentially going up to $4+ per gallon... ugh! 
That'd be a real buzzkill for road trips and summer adventures 
. We don't want to see inflation go through the roof 
. But at the same time, it's cool that they're trying to regulate oil production and keep things under control 
.
We'll just have to wait and see how this all plays out 
Anyway, I can see how that'd send gas prices through the roof. $3.80-3.90 per gallon is already crazy enough for me... I remember 2022 was wild, $5 per gallon? 
Now that's a price hike! 
. what's next? raising taxes? it's just a slippery slope, you know?