US Gas Prices Set for Sharp Spike as OPEC+ Announces Production Cut
A surprise move by the Organization of the Petroleum Exporting Countries (OPEC) and its allies has sent shockwaves through global energy markets, with US gas prices expected to rise sharply in the coming weeks. The group announced on Sunday that it would cut oil production by over 1.6 million barrels a day, starting from May, which will have a significant impact on Brent crude futures, the global benchmark for oil.
As a result of this move, both Brent and West Texas Intermediate (WTI) crude prices surged up about 6% in trading on Monday. However, it's not just oil prices that are expected to rise – gasoline futures are also projected to increase, with US drivers facing higher pump prices soon.
According to Tom Kloza, global head of energy analysis for OPIS, a leading provider of gas price data, "I think OPEC is reawakening the inflation monster." The White House may be taking notice of this development, and it could significantly alter the economic calculus. Kloza predicts that US gas prices will rise to around $3.80-$3.90 per gallon in relatively short order.
It's worth noting that while the average US regular gas price a year ago stood at $4.19 per gallon, following Russia's invasion of Ukraine and its impact on global energy markets, prices eventually reached a record high of $5.02 per gallon before declining over several months due to factors such as the release of oil from the Strategic Petroleum Reserve and concerns about a potential recession.
However, with US gas prices currently sitting at around $3.51 per gallon, which is just below the $3.53 average price on February 23, 2022, there are concerns that OPEC's production cut could push prices back up towards record levels. Kloza believes that while it's unlikely to reach as high as $4 or even $5 per gallon in the near term, US drivers may still see prices rise above year-earlier levels, particularly if a hurricane or other storm impacts production along the Gulf Coast.
The key factor here is OPEC's ability to cut production and their motivation to do so. Kloza believes that this move will be difficult for the group to reverse, and it could lead to a prolonged period of high gas prices in the US.
A surprise move by the Organization of the Petroleum Exporting Countries (OPEC) and its allies has sent shockwaves through global energy markets, with US gas prices expected to rise sharply in the coming weeks. The group announced on Sunday that it would cut oil production by over 1.6 million barrels a day, starting from May, which will have a significant impact on Brent crude futures, the global benchmark for oil.
As a result of this move, both Brent and West Texas Intermediate (WTI) crude prices surged up about 6% in trading on Monday. However, it's not just oil prices that are expected to rise – gasoline futures are also projected to increase, with US drivers facing higher pump prices soon.
According to Tom Kloza, global head of energy analysis for OPIS, a leading provider of gas price data, "I think OPEC is reawakening the inflation monster." The White House may be taking notice of this development, and it could significantly alter the economic calculus. Kloza predicts that US gas prices will rise to around $3.80-$3.90 per gallon in relatively short order.
It's worth noting that while the average US regular gas price a year ago stood at $4.19 per gallon, following Russia's invasion of Ukraine and its impact on global energy markets, prices eventually reached a record high of $5.02 per gallon before declining over several months due to factors such as the release of oil from the Strategic Petroleum Reserve and concerns about a potential recession.
However, with US gas prices currently sitting at around $3.51 per gallon, which is just below the $3.53 average price on February 23, 2022, there are concerns that OPEC's production cut could push prices back up towards record levels. Kloza believes that while it's unlikely to reach as high as $4 or even $5 per gallon in the near term, US drivers may still see prices rise above year-earlier levels, particularly if a hurricane or other storm impacts production along the Gulf Coast.
The key factor here is OPEC's ability to cut production and their motivation to do so. Kloza believes that this move will be difficult for the group to reverse, and it could lead to a prolonged period of high gas prices in the US.
just had breakfast and now i'm worried about my fuel bill lol opecs production cut is gonna hit gas prices hard 
think they're trying to wake up inflation but idk if us drivers can handle $3.80-$3.90 a gallon 
remember those crazy high prices after russia invaded ukraine? might be back to that level soon 
Kloza says it's all about "inflating the monster"... whatever that means but one thing's for sure - my wallet's gonna take a hit 
. i'm sure people are already getting anxious thinking about their summer road trips 
. This news about OPEC cutting oil production is super worrying. I don't think we've seen the last of higher gas prices 
. They were already around $3.51, and now it's expected to jump up to like $3.80-$3.90 per gallon? That's a big increase 
. I just hope that the White House can do something to mitigate the effects on average Americans 
.
... maybe it's time to consider alternative modes of transportation or just plan a road trip