OPEC+ Cracks Open the Lid on Higher US Gas Prices, Inflation Monster Reawakened.
The Organization of the Petroleum Exporting Countries (OPEC)+ alliance has made a surprise move to slash oil production by more than 1.6 million barrels per day, starting in May and running through the end of the year. This decision has sent shockwaves through global energy markets, with Brent crude futures and WTI rising about 6% in trading on Monday.
As a result, gasoline futures are also expected to soar, leading to higher US gas prices for consumers. According to Tom Kloza, global head of energy analysis at OPIS, which tracks gas prices for AAA, OPEC's move could awaken the "inflation monster," putting pressure on the White House and altering the economic calculus.
The national average for US gas prices is currently $3.51 per gallon, according to AAA, with Kloza predicting that it could reach as high as $3.80 to $3.90 in relatively short order. However, he also notes that prices may stabilize by the end of the summer if there are no significant disruptions to oil production along the Gulf Coast.
The move by OPEC+ is seen as a response to Russia's invasion of Ukraine and the resulting disruption to global energy markets. Prior to the invasion, US gas prices had reached a record $5.02 per gallon on June 14 but have since declined steadily due to concerns about a potential recession reducing demand for gasoline.
Despite the recent decline in prices, Kloza notes that they were still higher than pre-invasion levels, with prices just below $3.53 per gallon on February 23, 2022, the day before Russia's invasion of Ukraine. The US Strategic Petroleum Reserve (SPR) and increased oil production and refining capacity have helped to reduce prices, but a cut of 1 million barrels per day by OPEC+ will not be easy to make up.
OPEC+'s ability to adjust its production levels has been seen as a key factor in the alliance's decision. Kloza believes that they are motivated to take action and expects them to follow through on their commitment.
The Organization of the Petroleum Exporting Countries (OPEC)+ alliance has made a surprise move to slash oil production by more than 1.6 million barrels per day, starting in May and running through the end of the year. This decision has sent shockwaves through global energy markets, with Brent crude futures and WTI rising about 6% in trading on Monday.
As a result, gasoline futures are also expected to soar, leading to higher US gas prices for consumers. According to Tom Kloza, global head of energy analysis at OPIS, which tracks gas prices for AAA, OPEC's move could awaken the "inflation monster," putting pressure on the White House and altering the economic calculus.
The national average for US gas prices is currently $3.51 per gallon, according to AAA, with Kloza predicting that it could reach as high as $3.80 to $3.90 in relatively short order. However, he also notes that prices may stabilize by the end of the summer if there are no significant disruptions to oil production along the Gulf Coast.
The move by OPEC+ is seen as a response to Russia's invasion of Ukraine and the resulting disruption to global energy markets. Prior to the invasion, US gas prices had reached a record $5.02 per gallon on June 14 but have since declined steadily due to concerns about a potential recession reducing demand for gasoline.
Despite the recent decline in prices, Kloza notes that they were still higher than pre-invasion levels, with prices just below $3.53 per gallon on February 23, 2022, the day before Russia's invasion of Ukraine. The US Strategic Petroleum Reserve (SPR) and increased oil production and refining capacity have helped to reduce prices, but a cut of 1 million barrels per day by OPEC+ will not be easy to make up.
OPEC+'s ability to adjust its production levels has been seen as a key factor in the alliance's decision. Kloza believes that they are motivated to take action and expects them to follow through on their commitment.
it makes total sense that they'd wanna cut production given all the tensions with Russia 
their prices are still kinda high compared to before the invasion 
$3.51 is no joke! But I get why they're doing it - Ukraine and Russia's conflict has definitely thrown a wrench in global energy markets 
hope those prices don't skyrocket too much, or we'll all be facing some major economic stress 
OPEC+ thinks it can just waltz in here and raise gas prices again? Like, didn't we just recover from the last price hike? 
I'm not sure how much of this whole "inflation monster" thing is real... 
And great, just what we needed, another reason to avoid road trips this summer... 
Who needs a vacation anyway?
so i dunno if this is a good or bad thing, but it seems like we're gonna see some crazy gas prices soon 
. maybe by summer it'll calm down and we won't see such huge spikes. the thing is though, if prices get too high, people might start cutting back on gas which could impact the economy. so it's a delicate balance 
but seriously, how long can our economy keep going on like this? 
, it's like they think we can't handle $4+ gas prices 
, newsflash: people will still drive if they need to, no matter the price 
, it's time for the US to start taking care of its own energy needs instead of relying on foreign countries 
They think they're just trying to "regain control" but honestly, it's all about keeping the oil prices high for themselves. $3.80-$3.90 a gallon? Are you kidding me?! That's just going to make every American struggle to afford basic necessities like gas. And what's with the timing? Just when we thought things were getting back on track after that crazy Ukraine invasion, they go and raise prices again. It's like they're intentionally trying to wake up that "inflation monster" you mentioned, Tom Kloza. 
Anyway, I'm gonna be keeping a close eye on this situation...
The thing is, what's a few more bucks at the pump when you're living on a fixed income like me? 
. $3.80-$3.90 per gallon? That's crazy expensive 
. I get that global energy markets are all over the place due to Russia's invasion of Ukraine, but I wish there was more transparency about what OPEC+ is actually planning to do 
.
. I guess we'll just have to wait and see how this all plays out 
.
. What if it's all just a ruse to get people to panic about gas prices? I'm calling BS on this one 
gas prices are already high enuf, doesnt feel right when opec+ makes such big cut 
hope they're prepared for it 
they're basically trying to control the market and make some cash off us consumers 
OPEC+ just poked the bear and now we're gonna see some serious price hikes at the pump. I mean, $3.80 to $3.90 per gallon? That's like, whoa 
. And with the US Strategic Petroleum Reserve and all, it's gonna be hard to make up for this kind of reduction in production.
. But if they don't? That's just gonna add more fuel to the inflation fire 
. They gotta protect their interests too 