US Gas Prices Set for Bump as OPEC+ Slashes Oil Production
The Organization of the Petroleum Exporting Countries (OPEC) and its allies announced a surprise move to reduce oil production by over 1.6 million barrels per day, effective May and running through the end of the year. The news sent oil prices soaring, with Brent crude futures increasing about 6% in trading on Monday, and WTI, the US benchmark, also jumping up around 6%. As a result, gasoline futures are expected to rise sharply, leading to higher gas prices for US drivers.
Energy analysts predict that the national average for US gas prices will rise to $3.80 to $3.90 per gallon in relatively short order due to the reduced oil production by OPEC+. Tom Kloza, global head of energy analysis at OPIS, which tracks gas prices for AAA, warned that prices will not return to pre-pandemic levels of around $2.50 per gallon but may reach as high as $4 per gallon.
The reduction in oil production has an immediate impact on gasoline futures, with the wholesale price expected to rise by about 3%. The White House is likely to be concerned about the move, which could alter the economic calculus for a while. Kloza noted that the US Strategic Petroleum Reserve will release more oil to help stabilize prices, but the reduced production will make it challenging to offset.
One thing keeping gas prices from reaching record levels set in 2022 is that the US has plans to increase oil releases from the SPR and boost domestic production and refining capacity. However, OPEC's ability to reduce production and its apparent motivation to do so make the situation more complicated.
As a result of this move, US drivers can expect higher gas prices, with some analysts predicting a return to year-earlier prices by the end of summer if there are no major disruptions in oil production along the Gulf Coast.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies announced a surprise move to reduce oil production by over 1.6 million barrels per day, effective May and running through the end of the year. The news sent oil prices soaring, with Brent crude futures increasing about 6% in trading on Monday, and WTI, the US benchmark, also jumping up around 6%. As a result, gasoline futures are expected to rise sharply, leading to higher gas prices for US drivers.
Energy analysts predict that the national average for US gas prices will rise to $3.80 to $3.90 per gallon in relatively short order due to the reduced oil production by OPEC+. Tom Kloza, global head of energy analysis at OPIS, which tracks gas prices for AAA, warned that prices will not return to pre-pandemic levels of around $2.50 per gallon but may reach as high as $4 per gallon.
The reduction in oil production has an immediate impact on gasoline futures, with the wholesale price expected to rise by about 3%. The White House is likely to be concerned about the move, which could alter the economic calculus for a while. Kloza noted that the US Strategic Petroleum Reserve will release more oil to help stabilize prices, but the reduced production will make it challenging to offset.
One thing keeping gas prices from reaching record levels set in 2022 is that the US has plans to increase oil releases from the SPR and boost domestic production and refining capacity. However, OPEC's ability to reduce production and its apparent motivation to do so make the situation more complicated.
As a result of this move, US drivers can expect higher gas prices, with some analysts predicting a return to year-earlier prices by the end of summer if there are no major disruptions in oil production along the Gulf Coast.
just saw that opec+ cuttin back on oil production and it's gonna make gas go up 
like 3 bucks a gallon? that's crazy 
i was thinkin we were good after the pandemic but i guess opec got some tricks up its sleeve 
anyone else see this article? btw, they're sayin us drivers might get lucky and gas prices come back down by summer 
. opec+ has been trying to increase their influence and control over global oil markets, and this move is a clear signal that they're not gonna back down 
. it's interesting that the US government is already on high alert, but it's hard to blame them - with prices potentially reaching $4 per gallon, it could be a real challenge for consumers 
. still, i think there are some mitigating factors at play, like the SPR releases and domestic production increases, which might help to stabilize things a bit 
️. ultimately, it's gonna be an interesting ride to watch how this all plays out 
how much more can our wallets take? 
fingers crossed we won't have to shell out $4/gallon again anytime soon