OPEC+ Takes a Sharp Cut in Oil Production, Expected to Send US Gas Prices Soaring
In a move that's sending shockwaves through the global energy market, OPEC+ announced on Sunday that it will cut oil production by more than 1.6 million barrels per day starting May and running until the end of the year. The decision is expected to have an immediate impact on gasoline futures, leading to a surge in US gas 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 has likely taken notice, and with oil prices rising by about 6% in trading on Monday, US drivers can expect to see a significant increase in gas prices.
The national average for US gas prices currently stands at $3.51, but Kloza predicts that it could reach levels of $3.80 to $3.90 in the coming weeks. He notes that while prices may not return to record highs seen last year ($5.02 per gallon), they could potentially climb back above year-earlier prices by the end of summer if global production disruptions or storms affecting Gulf Coast production occur.
In comparison, gas prices were relatively stable just a few months ago, with the national average hovering around $3.53 on February 23, 2022, before Russia's invasion of Ukraine sent shockwaves through the energy market and prices skyrocketed.
Kloza acknowledges that OPEC+ has the ability to cut production and seems motivated to do so, but notes that making up for this reduction will not be easy. The US Strategic Petroleum Reserve is set to make additional releases, while domestic oil production and refining capacity have also increased since last year's price surge.
In a move that's sending shockwaves through the global energy market, OPEC+ announced on Sunday that it will cut oil production by more than 1.6 million barrels per day starting May and running until the end of the year. The decision is expected to have an immediate impact on gasoline futures, leading to a surge in US gas 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 has likely taken notice, and with oil prices rising by about 6% in trading on Monday, US drivers can expect to see a significant increase in gas prices.
The national average for US gas prices currently stands at $3.51, but Kloza predicts that it could reach levels of $3.80 to $3.90 in the coming weeks. He notes that while prices may not return to record highs seen last year ($5.02 per gallon), they could potentially climb back above year-earlier prices by the end of summer if global production disruptions or storms affecting Gulf Coast production occur.
In comparison, gas prices were relatively stable just a few months ago, with the national average hovering around $3.53 on February 23, 2022, before Russia's invasion of Ukraine sent shockwaves through the energy market and prices skyrocketed.
Kloza acknowledges that OPEC+ has the ability to cut production and seems motivated to do so, but notes that making up for this reduction will not be easy. The US Strategic Petroleum Reserve is set to make additional releases, while domestic oil production and refining capacity have also increased since last year's price surge.
I'm worried about the impact of OPEC+ cutting oil production on our gas prices in the US... it's already happening 
. I remember when gas was around $3 a gallon just a few years ago, and now we're already seeing prices go up by 6% just because OPEC+ is reducing supply? 
That's crazy! I know they can cut production, but making up for the difference won't be easy, right? 
The White House should do something to help with this... maybe import more oil from other countries or support domestic drilling. We need to make sure our energy prices don't become too unpredictable 
... I've got a granddaughter who's just starting college and she's going to be driving around a lot, you know? And her parents are already stressing about the cost of gas 
. Anyway, here's hoping they find a way to balance production with the need to keep up with demand 
OPEC+ is like the villain of energy markets, always messin up production levels and causin prices to skyrocket 
can't believe it's comin back to this... anyway, let's hope they don't cut off their oil supply to us americans or we'll be in big trouble 
gas prices are already gonna be through the roof by summer lol 
$3.80+? that's like, insane! and what's with this "reawakening the inflation monster" thing? sounds like some fancy economist jargon to me 
I know some people are all about the freedom of being able to choose their own gas station, but honestly, a $3.80 gallon is just crazy talk! 