OPEC+ Steps into the Fray, Fueling US Gas Price Surge
The Organization of the Petroleum Exporting Countries (OPEC) and its allies have made a surprise move to slash oil production by over 1.6 million barrels per day starting in May, with the aim of running through the end of the year. This decision has sent shockwaves throughout the global energy market, causing Brent crude futures and WTI, the US benchmark, to surge by approximately 6% in trading Monday.
The immediate impact of this move is already being felt at gas pumps across the United States, with gasoline futures experiencing a significant spike of about 8 cents per gallon, or around 3%. This increase will be passed on to US drivers much more quickly than the corresponding spike in oil prices.
Energy analysts are predicting that OPEC's production cut will have a substantial impact on US gas prices. Tom Kloza, global head of energy analysis for OPIS, which tracks gas prices for AAA, believes that OPEC is "rewakening the inflation monster" and has left the White House with little choice but to take immediate action.
Currently, the national average for US gas prices stands at $3.51 per gallon, according to AAA. Kloza forecasts that this price could rise to $3.80 to $3.90 in relatively short order, fueled by OPEC's production cut. While he rules out prices reaching as high as $4 or $5 a gallon, he notes that US drivers may see gas prices return to year-earlier levels towards the end of summer if there are disruptions to production along the Gulf Coast.
It is worth noting that OPEC's production cut comes on the heels of Russia's invasion of Ukraine and its subsequent impact on global energy markets. A year ago, the average US regular gas price was $4.19 per gallon, with prices eventually reaching a record high of $5.02 in June 2022 before beginning a decline.
The fact that OPEC has the ability to cut production and is motivated to do so bodes ill for US drivers. Kloza believes that the group's action will not be easy to offset, given the current level of oil reserves in the US Strategic Petroleum Reserve and the country's increasing oil production capacity.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies have made a surprise move to slash oil production by over 1.6 million barrels per day starting in May, with the aim of running through the end of the year. This decision has sent shockwaves throughout the global energy market, causing Brent crude futures and WTI, the US benchmark, to surge by approximately 6% in trading Monday.
The immediate impact of this move is already being felt at gas pumps across the United States, with gasoline futures experiencing a significant spike of about 8 cents per gallon, or around 3%. This increase will be passed on to US drivers much more quickly than the corresponding spike in oil prices.
Energy analysts are predicting that OPEC's production cut will have a substantial impact on US gas prices. Tom Kloza, global head of energy analysis for OPIS, which tracks gas prices for AAA, believes that OPEC is "rewakening the inflation monster" and has left the White House with little choice but to take immediate action.
Currently, the national average for US gas prices stands at $3.51 per gallon, according to AAA. Kloza forecasts that this price could rise to $3.80 to $3.90 in relatively short order, fueled by OPEC's production cut. While he rules out prices reaching as high as $4 or $5 a gallon, he notes that US drivers may see gas prices return to year-earlier levels towards the end of summer if there are disruptions to production along the Gulf Coast.
It is worth noting that OPEC's production cut comes on the heels of Russia's invasion of Ukraine and its subsequent impact on global energy markets. A year ago, the average US regular gas price was $4.19 per gallon, with prices eventually reaching a record high of $5.02 in June 2022 before beginning a decline.
The fact that OPEC has the ability to cut production and is motivated to do so bodes ill for US drivers. Kloza believes that the group's action will not be easy to offset, given the current level of oil reserves in the US Strategic Petroleum Reserve and the country's increasing oil production capacity.
. OPEC just decided to slash their own gas prices by 1.6 million barrels a day and now it's gonna be passed on to US drivers like us? Great, just what we needed, more money going out the window for something we can't even control. And they're predicting that our gas prices will surge to $3.80-3.90 a gallon in no time? Good luck with that 
. I mean, what's the point of having oil reserves if OPEC just decides to cut production on a whim? It's like they want us to suffer 
. And Kloza is right, it does seem like we're stuck with no choice but to take action. But who knows, maybe we'll just get caught up in another inflationary mess... 
. Gas prices are already stressing out people on the roads. Do you think it's reasonable for them to cut production like that? I mean, they're basically pushing the US to go back to $4+ a gallon. What if we can't get enough oil from other places? It could lead to shortages and panic buying. Has anyone thought about the impact on low-income families who already struggle with fuel costs? 
And don't even get me started on the inflation monster that OPEC is supposedly "rewaking". Like, hello! We're already feeling the effects of this nonsense and you're just now noticing? 
We deserve better than to be held hostage by a group of oil-producing nations. I'm all for increasing production and finding alternative sources of energy, but this is just a bunch of corporate greed and manipulation. 
. I'm talking $3.80-$3.90 per gallon?! That's crazy talk! 
. The White House better get ready for some major action or else people are gonna be FURIOUS 
energy analysts are saying it's gonna fuel inflation monster like Tom Kloza said and i don't think the White House has a choice but to take action 
just had to fill up my tank this morning and I'm already feeling the pinch with gas prices surging like 8 cents a gallon 
US drivers are gonna be stuck with astronomical prices all summer long 
but seriously, 6% surge in just one day? that's crazy talk. I'm not surprised though, they've been talking about taking control of the market for years. and now they're just gonna rip it from under our noses... or rather, our gas tanks 
. And what about all the people who can't afford higher gas prices? This is just gonna hurt them more and more... ugh 
.
It's always the same old story - oil prices are going up and up and up, and nobody knows how to stop it 
. And don't even get me started on the US Strategic Petroleum Reserve... that's not gonna help anyone in the short term 
. I guess we're all just gonna have to suffer through higher gas prices until summer rolls around 
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... I mean, why would they do that? 
. And 6% is nothing, it's like, a drop in the bucket 
. We should be worried about something more pressing, like climate change 
... but nope, OPEC gets to decide how much oil we have and when 
. I bet they just want to squeeze more money out of us 
... which would be great for everyone except US drivers who are already feeling the pinch 
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. One thing's for sure though - this move will have a significant impact on US drivers' wallets 
. The thing that's got me worried is how they're gonna offset this production cut - it sounds like OPEC has some serious leverage 
. We'll just have to wait and see if prices stabilize or keep climbing