OPEC+'s Shocking Move Sends US Gas Prices Soaring
In a surprise move, the Organization of the Petroleum Exporting Countries (OPEC) and its allies announced yesterday that they will slash oil production by over 1.6 million barrels per day starting in May. This unexpected decision has sent shockwaves through the energy markets, sending Brent crude futures and US benchmark WTI prices up about 6% on Monday.
The impact of this move is already being felt at US gas pumps, with wholesale gasoline prices rising by around 8 cents per gallon or 3%. 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 about this development, as it significantly alters the calculus for the US economy.
As a result, national average US gas prices have risen to $3.51 per gallon on Monday, with Kloza predicting that prices could reach $3.80 to $3.90 in relatively short order. However, he notes that prices are unlikely to get as high as $5 a gallon, and may even remain below the record-breaking levels seen last year.
The national average gas price of $4.19 per gallon at this time last year was largely driven by Russia's invasion of Ukraine and its impact on global energy markets. Prices eventually reached a record $5.02 per gallon before slowly declining over several months due to various factors, including the release of oil from the US Strategic Petroleum Reserve.
However, Kloza points out that even at current prices, US gas prices are just below the average price on February 23, 2022, the day before Russia's invasion of Ukraine. The key factor keeping prices in check is the planned additional releases from the SPR and the fact that US oil production and refining capacity have both increased.
Despite this, Kloza notes that a cut of 1 million barrels per day by OPEC+ will be challenging to offset, and suggests that one thing preventing prices from reaching record levels last year was the US's ability to release more oil from the SPR. However, he believes that OPEC has the capacity to cut production and seems motivated to do so.
In a surprise move, the Organization of the Petroleum Exporting Countries (OPEC) and its allies announced yesterday that they will slash oil production by over 1.6 million barrels per day starting in May. This unexpected decision has sent shockwaves through the energy markets, sending Brent crude futures and US benchmark WTI prices up about 6% on Monday.
The impact of this move is already being felt at US gas pumps, with wholesale gasoline prices rising by around 8 cents per gallon or 3%. 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 about this development, as it significantly alters the calculus for the US economy.
As a result, national average US gas prices have risen to $3.51 per gallon on Monday, with Kloza predicting that prices could reach $3.80 to $3.90 in relatively short order. However, he notes that prices are unlikely to get as high as $5 a gallon, and may even remain below the record-breaking levels seen last year.
The national average gas price of $4.19 per gallon at this time last year was largely driven by Russia's invasion of Ukraine and its impact on global energy markets. Prices eventually reached a record $5.02 per gallon before slowly declining over several months due to various factors, including the release of oil from the US Strategic Petroleum Reserve.
However, Kloza points out that even at current prices, US gas prices are just below the average price on February 23, 2022, the day before Russia's invasion of Ukraine. The key factor keeping prices in check is the planned additional releases from the SPR and the fact that US oil production and refining capacity have both increased.
Despite this, Kloza notes that a cut of 1 million barrels per day by OPEC+ will be challenging to offset, and suggests that one thing preventing prices from reaching record levels last year was the US's ability to release more oil from the SPR. However, he believes that OPEC has the capacity to cut production and seems motivated to do so.
oh man, this is wild! $3.51 a gallon?!?! like, what's next? we'll be paying 5 bucks a gallon for coffee too lol 
. i mean, i get it, opec has the power and all but still... this is a huge shock to the system. my wallet is already protesting 
. and Kloza's right tho, the us oil production has increased so much, we should be able to handle some cuts in production from opec+. still, i'm not holding my breath at this point... prices are gonna keep going up, mark my words 
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and it's not looking good for US gas prices. This OPEC move is like adding fuel to the fire 
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. I'm not sure how high prices will go, but it's clear that this move from OPEC+ will have a significant impact on US gas prices.
i mean who expects them to slash production by 1.6 million barrels a day? and now gas prices are skyrocketing 
it's like they're trying to hurt americans or something. but at the same time, i get why they'd wanna do this - it's all about the benjamins 
. With the OPEC+ move, I'm predicting prices could hit $3.80 to $3.90 in a relatively short order.
Here are some key stats:
️. The White House should be paying attention, this one's gonna affect the whole economy 
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I can imagine how frustrating it must be for you guys with rising gas prices 
. Sending you all positive vibes 
and hoping that prices don't get too out of hand 
. I'm not surprised prices are going up, but $3.80 to $3.90 per gallon? That's steep. Last year, we saw prices reach record levels before they came back down due to SPR releases and increased US oil production. But this cut is different - it's a bigger chunk of production being taken off the table. And with inflation on the rise, I'm not sure how much more the market can take 
like we were doing just fine at $3.51 a gallon. and Kloza's right, this cut of 1.6 million barrels per day is like, what even is that supposed to do? 
how's that gonna offset the whole thing? anyway, i guess we'll just have to wait and see how this all plays out 
So like, OPEC+ is cutting back on oil production by 1.6 million barrels a day starting in May, and that's sending shockwaves through the energy market... 
And now our gas prices are soaring! Like, I remember when gas was around $2.50 per gallon or something? 
what's next? higher prices for everything? 
theyre literally going up like crazy!!!! i was checking my phone and saw that my fave gas station just raised their price by 8 cents a gallon 
. i dont think we should be worried tho, kloza said prices might go back down eventually 
. btw $3.51 is still way cheaper than last year so im good 
gas prices are going up again 
I remember last year when prices were at $5 a gallon and everyone was all freaked out 
but it seems like they've stabilized a bit since then. still not great though 
and this new move by OPEC+ is just adding more fuel to the fire 
fingers crossed 