OPEC+ decision sparks US gas prices surge.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies announced a surprise move on Sunday to slash oil production by more than 1.6 million barrels per day, starting in May. This unexpected cut is expected to send shockwaves throughout the global energy market, including the United States.
As a result of this move, Brent crude futures and WTI, the US benchmark, jumped about 6% in trading on Monday. The impact will be felt at US gas pumps, with gasoline futures already seeing an increase of around 8 cents per gallon or 3%. This spike in oil prices is expected to lead to higher US gas prices, which currently stand at $3.51.
According to Tom Kloza, global head of energy analysis for OPIS, OPEC's move will reignite the "inflation monster." The White House and consumers alike are likely to be affected by this decision, with prices potentially reaching $3.80 to $3.90 in a short time frame.
Kloza believes that while US gas prices may not reach record levels of 2022, which saw prices soar to $5.02 per gallon on June 14, they could surpass year-earlier prices if global production is disrupted by hurricanes or other storms affecting the Gulf Coast.
The average US regular gas price a year ago was $4.19 per gallon in February 2022, just before Russia's invasion of Ukraine caused a significant spike in energy markets. The subsequent decline in prices was driven by factors such as oil releases from the US Strategic Petroleum Reserve and concerns about a potential global recession.
While some may view OPEC's decision as a mitigating factor, Kloza notes that the 1 million barrels per day reduction will be challenging to offset, especially considering the US's additional oil production and refining capacity.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies announced a surprise move on Sunday to slash oil production by more than 1.6 million barrels per day, starting in May. This unexpected cut is expected to send shockwaves throughout the global energy market, including the United States.
As a result of this move, Brent crude futures and WTI, the US benchmark, jumped about 6% in trading on Monday. The impact will be felt at US gas pumps, with gasoline futures already seeing an increase of around 8 cents per gallon or 3%. This spike in oil prices is expected to lead to higher US gas prices, which currently stand at $3.51.
According to Tom Kloza, global head of energy analysis for OPIS, OPEC's move will reignite the "inflation monster." The White House and consumers alike are likely to be affected by this decision, with prices potentially reaching $3.80 to $3.90 in a short time frame.
Kloza believes that while US gas prices may not reach record levels of 2022, which saw prices soar to $5.02 per gallon on June 14, they could surpass year-earlier prices if global production is disrupted by hurricanes or other storms affecting the Gulf Coast.
The average US regular gas price a year ago was $4.19 per gallon in February 2022, just before Russia's invasion of Ukraine caused a significant spike in energy markets. The subsequent decline in prices was driven by factors such as oil releases from the US Strategic Petroleum Reserve and concerns about a potential global recession.
While some may view OPEC's decision as a mitigating factor, Kloza notes that the 1 million barrels per day reduction will be challenging to offset, especially considering the US's additional oil production and refining capacity.
OMG, I'm already seeing the prices of gas go up in my area! Like, what's going on? OPEC is cutting production but it's still gonna have an impact on US gas prices?! 
It makes sense though, if they reduce supply, that means less oil for us to use and more money for them. But like, how are we supposed to deal with this? Are they expecting everyone to just chill on their gas-guzzling ways or something? 
I'm all about saving the planet but come on! Can't they find a better way to do it?! 
! They're basically trying to pinch pennies on oil prices by reducing supply, which means gas prices are gonna skyrocket 
. Like, $3.80-$3.90? That's crazy talk! I mean, yeah, it might not reach record levels like last year, but still... that's a big hike 
. Guess we'll just have to tighten our belts and hope for a miracle 
️.
. It's like they're playing with fire, expecting everyone to just chill while their prices go through the roof. $3.80 to $3.90 in no time?! That's crazy talk! And don't even get me started on how this is gonna affect inflation... it's like the "inflation monster" is going to eat us all up 
. Can't we just keep things stable for once? I swear, sometimes I wonder what kind of crazy thinking goes into these economic decisions 
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. The US has been increasing its oil production and refining capacity, so it's possible that these gains could offset some of the reduction in oil output by OPEC+. Additionally, if the global economy starts to show signs of a slowdown, prices might stabilize or even decrease.
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$3.51 to $3.80? that's like they're trolling us or something 
$3.51 -> $3.80/3.90 is just insane 
we need some other oil producing countries to step in and help out, or maybe some other solutions, cuz usa cant do it on its own 
and it made me think about how much gas I used on my way there... like, i was driving with a full tank and still had to fill up halfway through my trip? anyway, speaking of gas prices, did you know that some companies are now using bacteria to clean up oil spills in the ocean 
? sounds kinda cool if you ask me.
. Tom Kloza's got some valid points though, what with hurricanes or storms disrupting production and all that jazz 
that's like cutting off half our daily supply 
any way, here's a simple diagram to show how opec+ decision affects us 
here's a rough idea of how much it'll affect us 
i was just checkin out gas prices online & wow they're already at $3.51 lol i remember when it was like $4.19 last yr in feb. what's happenin?! 
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. I mean, $3.80-4.00 per gallon is still crazy expensive! Can't we just find a way to meet our energy demands without having to sacrifice so much? Maybe investing in renewable sources and increasing energy efficiency can be the answer 
. Where's the data? What about all the other factors at play here? Global demand, supply chain disruptions, and whatnot? We can't just dismiss the impact of hurricanes or other storms that might disrupt oil production 
. 1.6 million barrels per day is a big deal, but it's still just a drop in the ocean compared to the US's oil production. Hopefully they don't have a hurricane season that messes up the whole thing 
. Anyway, $3.80-$3.90 is not cool 
. Remember when gas was like $2.50 per gallon back in 2016? Those were the days 
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I'm not surprised that gas prices are about to skyrocket 
. And let's be real, $3.80 to $3.90 per gallon? That's just crazy talk! 
. Time to break out the calculator and see how much our wallets are gonna take a hit 
, another surprise from OPEC+ that's gonna hit our wallets hard 
- 'Hey, let's slash production by 1.6 million barrels a day, watch the prices go through the roof!' 
... anything to reduce our reliance on fossil fuels and these price swings 
