OPEC+ Unleashes Price Spike: Global Oil Benchmark Jumps 6% Amid Production Cut
In a move that's sending shockwaves through the energy market, the Organization of the Petroleum Exporting Countries (OPEC) and its allies have announced a surprise cut to oil production by more than 1.6 million barrels per day, starting in May. The decision is expected to have a ripple effect on gasoline prices at US gas pumps, with futures already jumping up about 8 cents a gallon or 3% in morning trading.
The cut has significant implications for the global economy, particularly in the United States, where US drivers will soon be feeling the pinch at the pump. Tom Kloza, global head of energy analysis for OPIS, which tracks gas prices for AAA, warned that OPEC's move "is reawakening the inflation monster." He believes the White House will be "shocked and major-time pissed" over the news.
As a result, US gas prices are expected to rise significantly, potentially reaching $3.80 to $3.90 by summer, according to Kloza. While some analysts predict that prices may eventually return to pre-pandemic levels, others caution that the US will not see a repeat of 2022's record-breaking highs.
The national average for US gas prices stood at $3.51 on Monday, just below the $3.53 average on February 23, 2022, the day before Russia's invasion of Ukraine. Kloza notes that the US Strategic Petroleum Reserve (SPR) has helped keep prices in check, with additional releases planned to mitigate the impact.
However, OPEC's decision will not be easy to offset. The group's ability to cut production and its motivation behind the move are seen as key factors. Kloza believes that OPEC "have ability to cut production and they seem motivated to do so."
As the energy market continues to grapple with the implications of this surprise move, US drivers can expect prices to continue rising in the coming weeks. With a hurricane or other storms affecting production along the Gulf Coast potentially pushing prices even higher, Kloza warns that prices may not return to year-earlier levels until summer.
In a move that's sending shockwaves through the energy market, the Organization of the Petroleum Exporting Countries (OPEC) and its allies have announced a surprise cut to oil production by more than 1.6 million barrels per day, starting in May. The decision is expected to have a ripple effect on gasoline prices at US gas pumps, with futures already jumping up about 8 cents a gallon or 3% in morning trading.
The cut has significant implications for the global economy, particularly in the United States, where US drivers will soon be feeling the pinch at the pump. Tom Kloza, global head of energy analysis for OPIS, which tracks gas prices for AAA, warned that OPEC's move "is reawakening the inflation monster." He believes the White House will be "shocked and major-time pissed" over the news.
As a result, US gas prices are expected to rise significantly, potentially reaching $3.80 to $3.90 by summer, according to Kloza. While some analysts predict that prices may eventually return to pre-pandemic levels, others caution that the US will not see a repeat of 2022's record-breaking highs.
The national average for US gas prices stood at $3.51 on Monday, just below the $3.53 average on February 23, 2022, the day before Russia's invasion of Ukraine. Kloza notes that the US Strategic Petroleum Reserve (SPR) has helped keep prices in check, with additional releases planned to mitigate the impact.
However, OPEC's decision will not be easy to offset. The group's ability to cut production and its motivation behind the move are seen as key factors. Kloza believes that OPEC "have ability to cut production and they seem motivated to do so."
As the energy market continues to grapple with the implications of this surprise move, US drivers can expect prices to continue rising in the coming weeks. With a hurricane or other storms affecting production along the Gulf Coast potentially pushing prices even higher, Kloza warns that prices may not return to year-earlier levels until summer.
OPEC's decision to cut oil production is definitely going to make our gas prices skyrocket! 
I was expecting it to go down after Russia's invasion but I guess they're trying to control the market. 
It's like, we were just starting to see prices come back down and now they're pushing us up again. I'm not sure how long this will last but for now, US gas prices are going to be a real pain in the wallet 
.
gas prices in usa gonna spike soon... think they'll reach $3.80-$3.90 by summer? that's crazy 
already feeling the pinch at the pump and it's not even may yet 
any chance us drivers will see those pre-pandemic prices again? 
doubt it 
opec's move is gonna have ripple effects on global economy too... inflation monster, anyone? 
. Like, I get it, they're trying to support their economies and all, but 6% jump in global oil benchmark is wild 
. And honestly, it's gonna be interesting to see how the US government responds 
. Are they gonna step in and try to mitigate the effects or just let the market sort itself out? I'm curious to see how all this plays out 
. The $3.80-$3.90 range by summer? That's crazy... I remember last year we were lucky to get gas for under 4 bucks a gallon 
. And yeah, the SPR is helping keep things relatively stable now but it's not like they can just magic up more oil 
. This cut is definitely gonna send shockwaves through the economy and I'm curious to see how the White House responds... will they try to intervene or just sit back and watch prices rise? 
. They're gonna keep prices high 'til they get what they want, and that's always gonna be us paying more for gas 
. I'm not surprised tho, I mean, OPEC has been saying they wanna cut production for ages 
. Now we just gotta wait and see how this plays out 
. Hopefully, those gas reserves will help keep things under control 
but on the flip side, at least the SPR is releasing more oil to try and keep things under control 
fingers crossed that production can go back up soon 
. I know the global economy is a big deal, but for us parents who have to put food on the table and pay bills, every little bit counts 
. BUT SERIOUSLY, THIS IS GOING TO HIT HARD ESPECIALLY FOR THOSE ON A BUDGET. MAYBE THEY SHOULD THINK ABOUT THE PEOPLE NOT ASKING FOR MORE THAN THEIR FAIR SHARE 
. ANYWAY, I JUST HOPE THEY HAVE SOME KIND OF SAFETY NET IN PLACE OR SOMETHING SO US DRIVERS DON'T LOSE THEIR MINDS 
gotta watch those numbers and see how it plays out 
Are they trying to boost their own oil profits or is there something else going on here? 
. I hope they have some tricks up their sleeve to offset the price spike. Maybe those SPR releases will come in handy 
It's like OPEC is playing some kinda energy market game and I'm not sure how to react 
. We've seen price spikes before and the economy seems to bounce back eventually.
. But overall, I don't think it'll be a disaster or anything 
. We'll just have to wait and see how things play out