OPEC's Surprise Move Sends US Gas Prices Soaring
In a surprise move, the OPEC+ group announced that it would slash oil production by over 1.6 million barrels per day, starting in May and lasting through the end of the year. This decision has sent shockwaves throughout the energy market, leading to a significant increase in global oil prices.
The impact on US gas prices was immediate, with Brent crude futures and WTI, the US benchmark, rising by about 6% in trading on Monday. Gasoline futures followed suit, jumping up by around 8 cents per gallon, or 3%, in morning trading. This rapid price spike will be felt at US gas pumps, where drivers can expect prices to rise significantly.
Tom Kloza, global head of energy analysis for OPIS, which tracks gas prices for AAA, warns that OPEC's move could "reawaken the inflation monster." The White House is likely to be concerned about the impact on consumer prices and the overall economy. Kloza estimates that US gas prices could reach $3.80 to $3.90 in relatively short order.
While some analysts believe that US gas prices may not return to record levels of 2022, which reached as high as $5.02 a gallon in June, others expect prices to stabilize once the summer season begins. A hurricane or other storms affecting production along the Gulf Coast could still drive up prices, however.
The average US regular gas price a year ago stood at $4.19 a gallon, but that was before Russia's invasion of Ukraine and the resulting energy market disruption. Since then, prices have declined, partly due to releases from the US Strategic Petroleum Reserve. The decline has been steady, with the average price falling every day for over three months.
However, OPEC's move could change this trajectory. Kloza notes that while the US plans additional releases from the SPR and oil production and refining capacity are both up, a cut of 1 million barrels per day of oil will not be easy to make up. The group's ability to cut production and their motivation to do so are key factors in determining the impact on prices.
With OPEC's surprise move sending US gas prices soaring, drivers can expect prices to rise significantly over the coming weeks. While some analysts predict a return to more normal price levels, others warn that the impact of this move could be long-lasting.
In a surprise move, the OPEC+ group announced that it would slash oil production by over 1.6 million barrels per day, starting in May and lasting through the end of the year. This decision has sent shockwaves throughout the energy market, leading to a significant increase in global oil prices.
The impact on US gas prices was immediate, with Brent crude futures and WTI, the US benchmark, rising by about 6% in trading on Monday. Gasoline futures followed suit, jumping up by around 8 cents per gallon, or 3%, in morning trading. This rapid price spike will be felt at US gas pumps, where drivers can expect prices to rise significantly.
Tom Kloza, global head of energy analysis for OPIS, which tracks gas prices for AAA, warns that OPEC's move could "reawaken the inflation monster." The White House is likely to be concerned about the impact on consumer prices and the overall economy. Kloza estimates that US gas prices could reach $3.80 to $3.90 in relatively short order.
While some analysts believe that US gas prices may not return to record levels of 2022, which reached as high as $5.02 a gallon in June, others expect prices to stabilize once the summer season begins. A hurricane or other storms affecting production along the Gulf Coast could still drive up prices, however.
The average US regular gas price a year ago stood at $4.19 a gallon, but that was before Russia's invasion of Ukraine and the resulting energy market disruption. Since then, prices have declined, partly due to releases from the US Strategic Petroleum Reserve. The decline has been steady, with the average price falling every day for over three months.
However, OPEC's move could change this trajectory. Kloza notes that while the US plans additional releases from the SPR and oil production and refining capacity are both up, a cut of 1 million barrels per day of oil will not be easy to make up. The group's ability to cut production and their motivation to do so are key factors in determining the impact on prices.
With OPEC's surprise move sending US gas prices soaring, drivers can expect prices to rise significantly over the coming weeks. While some analysts predict a return to more normal price levels, others warn that the impact of this move could be long-lasting.
... like, who benefits from higher gas prices? Not me, that's for sure 
. I think it's just another case of OPEC trying to squeeze more cash outta the US market 
. And honestly, I don't think a 6% increase is too shabby for their wallet 
. The White House should be all over this like a bad rash 
- someone needs to make sure these price hikes don't hurt the average Joe in the long run 
.
. The White House needs to step up and talk about this more urgently 
, especially since Tom Kloza says it could "reawaken the inflation monster" 
. I'm all for some price stability, you know?
3-4 dollars per gallon is already old news for me, but I guess for most people it's like, "WHOA, prices are high again!" 
. I don't know what Tom Kloza said, but I'm pretty sure he's right that this could "reawaken the inflation monster" 
. Anyway, just thought I'd share my two cents on this wild development 
.
. The impact on US gas prices is crazy fast, and it's gonna hit people hard 
. I'm all for the White House being concerned about inflation, but this move has got everyone spooked 
. The thing is, some folks think prices might not go back up to record levels, but I'm like, "Uh, no way." This could be a long-term thing 
. A hurricane or another disaster in the Gulf Coast? Yeah, that's just the cherry on top of this mess 
. Can't wait for that summer season, hoping it brings some relief 
.
. I'm hoping the summer will bring some relief, maybe the weather will cool down and people won't wanna drive as much? Fingers crossed! 
. Now we'll see if the US can respond in kind, or if they'll just sit back and absorb the price shock 
i'm talking $3.80-$3.90 a gallon like Kloza said 
at least the us SPR is releasing more oil tho 
guess ur just stuck with higher prices 4 the time being 
. The impact on the economy is already being felt and it's not looking good 
.
.
. It's just one of those things that we have to deal with, right? 
I'm thinking the White House is gonna have a lot to deal with now. The inflation monster is real and it's coming after our wallets 
. I know OPEC has its reasons for cutting production, but it's gonna hurt a lot of people at the pump. I've been using gas for years and I'm still trying to get used to paying $4.50 a gallon 
. And now US gas prices are gonna skyrocket? 
. One minute gas prices are low, next they're skyrocketing due to OPEC's surprise move 
