OPEC+ Cracks Open the Lid on Higher US Gas Prices Amid Global Oil Production Cuts
In a surprise move, OPEC+, a group of oil-producing countries, announced Sunday that it will slash global oil production by over 1.6 million barrels per day starting in May and ending in December. The news has sent shockwaves through the energy market, with Brent crude futures and WTI, the US benchmark, jumping up about 6% in trading on Monday.
The immediate impact of this move is already being felt at US gas pumps. Gasoline futures prices have surged, with RBOB, the most closely watched wholesale gasoline price, increasing by about 8 cents a gallon, or 3%, in morning trading. This will be passed onto US drivers much more quickly than the spike in oil prices.
According to Tom Kloza, global head of energy analysis for OPIS, which tracks gas prices for AAA, "I think OPEC is reawakening the inflation monster." The White House will likely be shocked and concerned by this development, as it alters the calculus for a while. Kloza predicts that US gas prices could reach up to $3.80 to $3.90 in relatively short order.
The national average for US gas prices stood at $3.51 on Monday, according to AAA. While some are optimistic that prices may not get back to record levels of 2022, when gas prices reached as high as $5 a gallon, others believe that the impact of this move will be felt for several months.
One factor that could mitigate the effects of this move is the US Strategic Petroleum Reserve (SPR). The SPR has been releasing oil in recent months to stabilize the market. Additionally, US oil production and refining capacity have both increased, which should help offset some of the cuts made by OPEC+.
However, Kloza notes that a cut of 1 million barrels per day of oil by OPEC+ will not be easy to make up. Despite this, he believes that OPEC+ has the ability to cut production and seems motivated to do so.
As a result, US gas prices are likely to continue their upward trend in the coming months. While it's difficult to predict exactly when prices will peak, experts agree that we can expect to see higher prices for several months.
In a surprise move, OPEC+, a group of oil-producing countries, announced Sunday that it will slash global oil production by over 1.6 million barrels per day starting in May and ending in December. The news has sent shockwaves through the energy market, with Brent crude futures and WTI, the US benchmark, jumping up about 6% in trading on Monday.
The immediate impact of this move is already being felt at US gas pumps. Gasoline futures prices have surged, with RBOB, the most closely watched wholesale gasoline price, increasing by about 8 cents a gallon, or 3%, in morning trading. This will be passed onto US drivers much more quickly than the spike in oil prices.
According to Tom Kloza, global head of energy analysis for OPIS, which tracks gas prices for AAA, "I think OPEC is reawakening the inflation monster." The White House will likely be shocked and concerned by this development, as it alters the calculus for a while. Kloza predicts that US gas prices could reach up to $3.80 to $3.90 in relatively short order.
The national average for US gas prices stood at $3.51 on Monday, according to AAA. While some are optimistic that prices may not get back to record levels of 2022, when gas prices reached as high as $5 a gallon, others believe that the impact of this move will be felt for several months.
One factor that could mitigate the effects of this move is the US Strategic Petroleum Reserve (SPR). The SPR has been releasing oil in recent months to stabilize the market. Additionally, US oil production and refining capacity have both increased, which should help offset some of the cuts made by OPEC+.
However, Kloza notes that a cut of 1 million barrels per day of oil by OPEC+ will not be easy to make up. Despite this, he believes that OPEC+ has the ability to cut production and seems motivated to do so.
As a result, US gas prices are likely to continue their upward trend in the coming months. While it's difficult to predict exactly when prices will peak, experts agree that we can expect to see higher prices for several months.
Gas prices are gonna be thru the roof now 
. I'm not surprised tho, OPEC+ is all about control & making a buck 
. 1.6 million barrels a day cut? That's a big deal 
. US production & refining capacity has increased, but I doubt it'll make a huge difference in the grand scheme 
. SPR releasing oil will help, but not enough to stop this price surge 
. I'm guessing we'll see $4+ soon, and that's just for starters 
. My guess is $3.80-$3.90 by summer, mark my words 
.
. They think they're reaping benefits from their production cuts but really they're just making our lives more expensive 
. I'm not a fan of these price hikes, it's not just about the money; it's about how we can't even afford to fill up our tanks without breaking the bank 
.
. I mean, sure, releasing some oil from reserve is better than nothing, but it's just gonna be a short-term fix. We need real solutions here, not just some temporary band-aid.
. I'm not surprised though, they're basically saying "we don't care about the US market anymore". 1.6 million barrels a day? That's massive. It's like they're playing with fire and everyone else has to feel the heat 
. The SPR is just a Band-Aid on a bullet wound. We should've seen this coming, but still... I'm all for investing in alternative energy sources tho 
.
, and US drivers aren't gonna be too happy about it 
. The White House will definitely be keeping a close eye on this one 
. It's not looking good for $3.50 gasoline prices anymore... more like the $4+ mark 
anyway just keep an eye on those gas prices and maybe stock up if u can 
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. Cutting oil production by 1.6 million barrels per day is a big deal and it's already causing US gas prices to jump 
.
and they're not even related to the topic! it's so annoying when i come here expecting a discussion about oil prices but instead get flooded with ads for questionable supplements 
can't we all just have a civilized conversation without some spammer ruining the vibe? 
and everything kept falling apart 
anyway back to this oil thing... did u know that some ppl are actually making their own soap at home? like, with natural ingredients and everything 
i've always been curious about it, but i don't think i could ever get the hang of mixing all those weird chemicals together 
. releasing oil from the spr or exploring more sustainable energy sources might help mitigate the effects 
But apparently, it's like a domino effect and now prices are surging. What's going on with this global market? 
Anyway, I guess we'll just have to wait and see how this plays out. Hopefully, prices won't skyrocket too much or it's gonna be a real hassle for everyone