OPEC's Shocking Move Sends US Gas Prices Soaring.
The Organization of the Petroleum Exporting Countries (OPEC) has made a surprise move to slash oil production by more than 1.6 million barrels a day, effective May and running through the end of the year. This drastic cut will undoubtedly have far-reaching consequences on global energy markets, particularly in the United States.
The immediate impact of this move can be seen in gasoline futures, which skyrocketed about 8 cents a gallon, or around 3%, in morning trading. Consequently, US gas prices are likely to follow suit, with experts predicting that national averages could reach $3.80 to $3.90 per gallon in the short term.
Tom Kloza, global head of energy analysis for OPIS, warned that this move "reawakens the inflation monster." The White House is expected to be "shocked and major-time pissed" by this development, which will significantly alter the calculus on fuel prices.
As of Monday, US gas prices stood at $3.51 per gallon, according to AAA. Kloza predicted that prices could rise further, potentially reaching $4 or higher in the near future. However, he also noted that there's a possibility that prices might stabilize by the end of summer, especially if production disruptions along the Gulf Coast are exacerbated by hurricanes or other severe weather conditions.
It's worth noting that gas prices were already relatively low compared to last year. A year ago, US regular gas price averaged $4.19 per gallon in the wake of Russia's invasion of Ukraine and subsequent energy market disruption. Although prices eventually peaked at a record $5.02 per gallon on June 14, they declined steadily over three months before stabilizing.
The key factor influencing gas prices today is OPEC's decision to reduce oil production. Kloza acknowledged that the US Strategic Petroleum Reserve has helped lower prices in recent months, but he emphasized that this move will make it difficult for the US to offset the reduced supply. The ability of OPEC to cut production and stick to their plan remains a crucial factor in shaping the global energy landscape.
The Organization of the Petroleum Exporting Countries (OPEC) has made a surprise move to slash oil production by more than 1.6 million barrels a day, effective May and running through the end of the year. This drastic cut will undoubtedly have far-reaching consequences on global energy markets, particularly in the United States.
The immediate impact of this move can be seen in gasoline futures, which skyrocketed about 8 cents a gallon, or around 3%, in morning trading. Consequently, US gas prices are likely to follow suit, with experts predicting that national averages could reach $3.80 to $3.90 per gallon in the short term.
Tom Kloza, global head of energy analysis for OPIS, warned that this move "reawakens the inflation monster." The White House is expected to be "shocked and major-time pissed" by this development, which will significantly alter the calculus on fuel prices.
As of Monday, US gas prices stood at $3.51 per gallon, according to AAA. Kloza predicted that prices could rise further, potentially reaching $4 or higher in the near future. However, he also noted that there's a possibility that prices might stabilize by the end of summer, especially if production disruptions along the Gulf Coast are exacerbated by hurricanes or other severe weather conditions.
It's worth noting that gas prices were already relatively low compared to last year. A year ago, US regular gas price averaged $4.19 per gallon in the wake of Russia's invasion of Ukraine and subsequent energy market disruption. Although prices eventually peaked at a record $5.02 per gallon on June 14, they declined steadily over three months before stabilizing.
The key factor influencing gas prices today is OPEC's decision to reduce oil production. Kloza acknowledged that the US Strategic Petroleum Reserve has helped lower prices in recent months, but he emphasized that this move will make it difficult for the US to offset the reduced supply. The ability of OPEC to cut production and stick to their plan remains a crucial factor in shaping the global energy landscape.
omg what's going on with our gas prices?! they're literally sky-rocketing (no pun intended) and it's like my wallet is going to cry 
$3.80 to $3.90 per gallon?! that's insane! i'm not even kidding when i say that this is like the last thing i need right now 
i was already trying to pinch pennies left and right and then boom, opec just decides to reduce oil production by over 1.6 million barrels a day?! it's like they're playing some kind of cruel joke on us 
but seriously $3.80 to $3.90 per gallon is a bit steep even for me lol 
i remember last year when the russia invasion happened and gas prices were like $5.02 per gallon that was wild 
, 8 cents a gallon is a pretty big jump! I mean, yeah, we all know OPEC's got some influence on oil prices, but this move is gonna cause some ripples 
It's not like OPEC just did them dirty... it's just business 
. This whole situation is gonna make inflation monster Tom Kloza proud 
. The US SPR might have been helping keep prices down, but OPEC's cut is like a big ol' Band-Aid on a bullet wound 
.
$3.80 
$4.00 
]
$3.51 to $4+ 
.
But what's concerning is the predicted price range: $3.80-$3.90/gallon in the short term 
. A quick look at historical data shows us that prices tend to fluctuate with global demand and supply chain disruptions 
.
... but we'll see how it plays out over the summer months. Maybe prices will stabilize, maybe they won't 
. One thing's for sure: OPEC's decision is going to shake things up in the energy market 
OPEC's move is like a game of supply and demand... but with more oil 
Let's see how long they can stick to their plan