OPEC+ Unleashes Inflationary Pressure: US Gas Prices Poised for Sharp Spike
A surprise move by the Organization of the Petroleum Exporting Countries (OPEC+) to slash oil production has sent shockwaves throughout global energy markets, with US gas prices expected to take a sharp hit in the coming weeks. The group's decision to cut production by more than 1.6 million barrels per day starting May will be felt at gas pumps across the country, driving up prices and rekindling inflation concerns.
The news has already had an immediate impact on gasoline futures, with RBOB, the most closely watched wholesale gasoline price, surging by about 8 cents a gallon or 3% in morning trading. This uptick is expected to be passed down to US drivers more quickly than oil prices, leaving many motorists bracing for higher costs at the pump.
Experts warn that OPEC's move could reawaken the inflation monster, with Tom Kloza, global head of energy analysis for OPIS, stating, "The White House has to be shocked and major-time pissed. It certainly alters the calculus for a while." Kloza forecasts US gas prices will reach as high as $3.80 to $3.90 in relatively short order, surpassing last year's average price of $4.19 per gallon.
While some experts believe that prices may not reach record levels of 2022 – which saw prices surge to $5.02 a gallon on June 14 – others warn that the impact could be felt for months to come. The potential disruption to production in the Gulf Coast region, particularly due to hurricanes, may also drive up costs.
In contrast to last year's post-Ukraine invasion price spikes, Kloza notes that this time around, one key factor is the US Strategic Petroleum Reserve (SPR), which has been actively releasing oil to ease prices. Additionally, the country's oil production and refining capacity have increased since 2022. However, OPEC's move remains a significant challenge for policymakers, who must navigate these complex dynamics to stabilize energy markets.
As prices begin to rise, consumers will be forced to confront the reality of higher costs at the pump. While some experts believe that prices may eventually stabilize or decline again, others warn that the impact of OPEC's production cut could be felt for a while, leaving motorists facing significant price hikes in the months ahead.
A surprise move by the Organization of the Petroleum Exporting Countries (OPEC+) to slash oil production has sent shockwaves throughout global energy markets, with US gas prices expected to take a sharp hit in the coming weeks. The group's decision to cut production by more than 1.6 million barrels per day starting May will be felt at gas pumps across the country, driving up prices and rekindling inflation concerns.
The news has already had an immediate impact on gasoline futures, with RBOB, the most closely watched wholesale gasoline price, surging by about 8 cents a gallon or 3% in morning trading. This uptick is expected to be passed down to US drivers more quickly than oil prices, leaving many motorists bracing for higher costs at the pump.
Experts warn that OPEC's move could reawaken the inflation monster, with Tom Kloza, global head of energy analysis for OPIS, stating, "The White House has to be shocked and major-time pissed. It certainly alters the calculus for a while." Kloza forecasts US gas prices will reach as high as $3.80 to $3.90 in relatively short order, surpassing last year's average price of $4.19 per gallon.
While some experts believe that prices may not reach record levels of 2022 – which saw prices surge to $5.02 a gallon on June 14 – others warn that the impact could be felt for months to come. The potential disruption to production in the Gulf Coast region, particularly due to hurricanes, may also drive up costs.
In contrast to last year's post-Ukraine invasion price spikes, Kloza notes that this time around, one key factor is the US Strategic Petroleum Reserve (SPR), which has been actively releasing oil to ease prices. Additionally, the country's oil production and refining capacity have increased since 2022. However, OPEC's move remains a significant challenge for policymakers, who must navigate these complex dynamics to stabilize energy markets.
As prices begin to rise, consumers will be forced to confront the reality of higher costs at the pump. While some experts believe that prices may eventually stabilize or decline again, others warn that the impact of OPEC's production cut could be felt for a while, leaving motorists facing significant price hikes in the months ahead.
US gas prices are gonna skyrocket! Like, we're talkin' $3.80 to $3.90 a gallon 
. I know some folks think it's just gonna pass down to oil prices and all that, but trust me, people are already feelin' the pinch 
. And don't even get me started on inflation – this is like, the last thing we need right now 
. The economy was already strugglin' with supply chain issues and whatnot, so now we're gonna have to deal with higher gas prices? It's just not ideal. I mean, I'm all for a strong dollar and lower oil prices, but this OPEC move is like, the ultimate party pooper 
. We need some other countries or organizations to step in and stabilize energy markets. Until then, we're stuck dealin' with the consequences 
.
They need to rethink their strategy and not just blame OPEC for everything. The SPR is doing its thing, but it's not like they can control every hurricane in the Gulf Coast. What's next, a gas embargo? No way... this could get real ugly, real fast 
! We're talkin' $3.80 to $3.90 a gallon in NO TIME 
like back in 2022 when they hit $5.02 a gallon?! 
! This time around, it's more complicated... OPEC+ is bringin' the heat 
! 
but others are warnin' us that OPEC's move could have a LASTING IMPACT 
!
!
. If it's really able to ease pressure and stabilize prices, that's a definite win for consumers. But if OPEC's move is too big of a deal, then we're looking at some serious pain at the pump in the months ahead 
i guess opec+ is tryna balance their budgets but it feels like they're just gonna hurt regular people like me who can barely afford to pay bills as it is 
like wut?! they're gonna raise gas prices even more? 
maybe we can also start a community to share tips and tricks on how to save money on gas 
, but it's not enough to offset the impact of OPEC's move.
. And can we talk about how oil production and refining capacity have increased since 2022? That's definitely a positive, but I guess the OPEC move takes priority right now 
.
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