US Gas Prices Set to Rise as OPEC+ Announces Production Cut
A surprise move by the Organization of Petroleum Exporting Countries (OPEC+) to slash oil production will likely lead to higher US gas prices in the coming months. The group announced on Sunday that it would cut oil production by more than 1.6 million barrels a day starting May and running through December.
The news has sent shockwaves through global energy markets, causing Brent crude futures to jump about 6% in trading Monday, while WTI futures also saw significant gains. The impact will be felt at US gas pumps sooner rather than later, with some analysts predicting a spike in gasoline prices by the end of the week.
"This is reawakening the inflation monster," said Tom Kloza, global head of energy analysis for OPIS, which tracks gas prices for AAA. "The White House has to be shocked and major-time pissed. It certainly alters the calculus for a while." The current national average for US gas prices stands at $3.51, but Kloza expects it could reach as high as $3.80 to $3.90 in relatively short order.
The cut in oil production will not only push up gas prices but also impact the overall energy market. While some analysts believe that the US is unlikely to see gas prices reach record levels of $5 a gallon, Kloza notes that there could be an exception if a hurricane or other storms affect production along the Gulf Coast.
In contrast to last year's prices, which were driven by Russia's invasion of Ukraine and subsequent energy market disruptions, the current surge in US gas prices is largely due to OPEC+'s decision. Even at $3.51, US gas prices are still higher than they were on February 23, 2022, when the national average was $3.53.
The reason for this increased pressure lies not with the US's own energy production but rather in global supply and demand dynamics. As Kloza noted, the US plans additional releases from its Strategic Petroleum Reserve, which has helped to stabilize prices. However, OPEC+'s move to cut oil production will make it more challenging to offset these losses.
"Their ability to cut production is not going to be easy to make up," said Kloza. Nonetheless, he believes that OPEC+ seems motivated to reduce output and notes that the US's own energy sector has some advantages that could help mitigate the impact of this move.
A surprise move by the Organization of Petroleum Exporting Countries (OPEC+) to slash oil production will likely lead to higher US gas prices in the coming months. The group announced on Sunday that it would cut oil production by more than 1.6 million barrels a day starting May and running through December.
The news has sent shockwaves through global energy markets, causing Brent crude futures to jump about 6% in trading Monday, while WTI futures also saw significant gains. The impact will be felt at US gas pumps sooner rather than later, with some analysts predicting a spike in gasoline prices by the end of the week.
"This is reawakening the inflation monster," said Tom Kloza, global head of energy analysis for OPIS, which tracks gas prices for AAA. "The White House has to be shocked and major-time pissed. It certainly alters the calculus for a while." The current national average for US gas prices stands at $3.51, but Kloza expects it could reach as high as $3.80 to $3.90 in relatively short order.
The cut in oil production will not only push up gas prices but also impact the overall energy market. While some analysts believe that the US is unlikely to see gas prices reach record levels of $5 a gallon, Kloza notes that there could be an exception if a hurricane or other storms affect production along the Gulf Coast.
In contrast to last year's prices, which were driven by Russia's invasion of Ukraine and subsequent energy market disruptions, the current surge in US gas prices is largely due to OPEC+'s decision. Even at $3.51, US gas prices are still higher than they were on February 23, 2022, when the national average was $3.53.
The reason for this increased pressure lies not with the US's own energy production but rather in global supply and demand dynamics. As Kloza noted, the US plans additional releases from its Strategic Petroleum Reserve, which has helped to stabilize prices. However, OPEC+'s move to cut oil production will make it more challenging to offset these losses.
"Their ability to cut production is not going to be easy to make up," said Kloza. Nonetheless, he believes that OPEC+ seems motivated to reduce output and notes that the US's own energy sector has some advantages that could help mitigate the impact of this move.
i think $3.80-$3.90 a gallon is pretty realistic now, it's not gonna be like they're gonna reach that crazy high of $5 a gallon anytime soon but still, it's not good for people on a budget. i feel bad for california drivers who are already dealing with some serious pain at the pump 
The OPEC+ decision to cut oil production is sending shockwaves through the global energy market and I'm expecting my daily commute to get even more expensive 
It's gonna be a wild ride, folks! The good news is that we're expecting some additional oil releases from the US Strategic Petroleum Reserve to help stabilize prices... but let's be real, I'm not holding my breath 
. Time to get creative with my road trips and explore cheaper fuel options or just plan on spending more cash at the pump 
Gas prices are about to get a serious boost 
! I'm not surprised, though - we've been warning about this possibility for a while now 
. It's going to affect the entire energy market, making gas prices rise faster than usual 
. Don't even get me started on the hurricanes and storms that could further disrupt production... it's like the energy market is a never-ending rollercoaster 
.
. But let's be real - this move from OPEC+ is going to make things more complicated 
. I'm curious to see how the US energy sector responds and whether they can mitigate the impact of this production cut 
.
but at the same time, i guess their decision does make sense in a way... global supply and demand and all that jazz 
it's just frustrating cuz we're still paying way too much for gas, even when it's not like us is producing more oil or anything 
like, we already know that OPEC+ is a bunch of no good, always trying to screw with global energy markets 
The recent decision by OPEC+ to cut oil production is like, super weird right now 
. I'm already feeling the pinch with my $3.51 average US gas price - can't it just stay at $3.53 from last year? 
. And Kloza's right, if there's a hurricane or something along the Gulf Coast, US gas prices could go crazy 
.
. I thought we were making progress in stabilizing global energy markets 
. Instead, it seems like we're back to square one 
.
. In the meantime, I'm gonna fill up my tank and try not to think about the price increase 
i hope opec+ makes it up somehow, but honestly i'm lowkey panicking over here