OPEC+ Steps Up Gas Prices in US, Fueling Inflation Concerns
In a surprise move, OPEC+ announced Sunday that it would slash oil production by more than 1.6 million barrels a day starting May, with the cut set to run through the end of the year. The move sent shockwaves through global energy markets, leading to a surge in Brent crude futures and WTI, the US benchmark.
According to Tom Kloza, global head of energy analysis for OPIS, which tracks gas prices for AAA, OPEC's decision is likely to "reawaken the inflation monster." This suggests that the White House will face increased pressure to respond to rising gas prices. In fact, gas futures are already feeling the pinch, with RBOB, the most closely watched wholesale gasoline price, up 8 cents a gallon or about 3% in morning trading.
As a result, US drivers can expect to see gas prices rise, with Kloza predicting that prices could reach $3.80 to $3.90 per gallon relatively quickly. While this may seem like a small increase compared to the record highs seen last year ($5.02 per gallon), it's worth noting that even at $3.51, US gas prices are still just below their February 2022 average of $3.53.
The reason for this is that while the US Strategic Petroleum Reserve has released oil in recent months, OPEC's production cut will make it challenging to offset this decline. Kloza noted that one factor working in favor of US producers is the potential release of oil from the SPR and the fact that US oil production and refining capacity have both increased.
However, with a 1 million-barrel-per-day production cut, the market may struggle to absorb the loss. As a result, gas prices are likely to rise, particularly if there are disruptions in production along the Gulf Coast, which could be exacerbated by hurricanes or other severe weather events.
Ultimately, while OPEC's decision is unlikely to push US gas prices back above $5 per gallon just yet, it will undoubtedly put upward pressure on prices and fuel concerns about inflation.
In a surprise move, OPEC+ announced Sunday that it would slash oil production by more than 1.6 million barrels a day starting May, with the cut set to run through the end of the year. The move sent shockwaves through global energy markets, leading to a surge in Brent crude futures and WTI, the US benchmark.
According to Tom Kloza, global head of energy analysis for OPIS, which tracks gas prices for AAA, OPEC's decision is likely to "reawaken the inflation monster." This suggests that the White House will face increased pressure to respond to rising gas prices. In fact, gas futures are already feeling the pinch, with RBOB, the most closely watched wholesale gasoline price, up 8 cents a gallon or about 3% in morning trading.
As a result, US drivers can expect to see gas prices rise, with Kloza predicting that prices could reach $3.80 to $3.90 per gallon relatively quickly. While this may seem like a small increase compared to the record highs seen last year ($5.02 per gallon), it's worth noting that even at $3.51, US gas prices are still just below their February 2022 average of $3.53.
The reason for this is that while the US Strategic Petroleum Reserve has released oil in recent months, OPEC's production cut will make it challenging to offset this decline. Kloza noted that one factor working in favor of US producers is the potential release of oil from the SPR and the fact that US oil production and refining capacity have both increased.
However, with a 1 million-barrel-per-day production cut, the market may struggle to absorb the loss. As a result, gas prices are likely to rise, particularly if there are disruptions in production along the Gulf Coast, which could be exacerbated by hurricanes or other severe weather events.
Ultimately, while OPEC's decision is unlikely to push US gas prices back above $5 per gallon just yet, it will undoubtedly put upward pressure on prices and fuel concerns about inflation.
the us is already dealing with inflation worries and this isn't helping 
my friends in california are still paying like 6 bucks a gallon for gas, that's crazy expensive 
I don't know about this, but it sounds like a perfect storm for higher gas prices! With OPEC+ cutting production, it's gonna be tough for the US to keep up with demand. And if there are any issues with production in the Gulf Coast, forget about it 
. The last thing we need is another round of price hikes when people are already feeling the pinch from inflation. I'm keeping my fingers crossed that the SPR can help ease things a bit, but I'm not holding my breath 
.
, like seriously who needs that kinda stress? 
already 3.80 to 3.90 is not good, i mean we're still below the 2022 avg tho 
but I guess it's no surprise with OPEC cutting production and all that jazz 
anyway I hope our economy is strong enough to handle it and I'll just have to stock up on snacks and stuff for my road trips 
️. We're all connected, and small changes in one area can have ripple effects everywhere.
. It's like a big jigsaw puzzle, where each piece fits together to form a bigger picture. We need to be aware of how our actions (or inactions) can impact others.
and diversify our resources. We don't want to rely too heavily on anyone or anything, because when things go wrong (and they will), we need to be prepared to adapt 
.
. So, what can you do today to make a positive impact? Start with something small, like reducing your energy consumption or exploring alternative transportation options 
. Every little bit counts!
I swear, the rich are getting richer and the poor are getting poorer... it's like we're living in some kind of dystopian nightmare! 
. Everyone's all worried about inflation and whatnot, but let's be real, $3.80 to $3.90 per gallon is still pretty chill compared to last year's record highs.
. Like, if they don't step in soon, we could see $3.80-$3.90 per gallon easily 
️. But at the same time, I think we gotta be real for a sec, even with all these fluctuations, gas prices are still pretty reasonable compared to last year 
. So yeah, it's gonna be an interesting ride, but I don't think we're looking at $5 per gallon just yet 
.
. Mark my words, this is just gonna be another example of how our economy is super vulnerable to these kinds of supply chain disruptions