OPEC's Surprise Move Sends US Gas Prices Soaring
A surprise move by OPEC+ to slash oil production has sent shockwaves through the global energy market, with US gas prices expected to rise sharply in the coming weeks. The group announced a reduction of over 1.6 million barrels per day, starting from May, which will have an immediate impact on gasoline futures and ultimately drive up prices at US gas pumps.
The news sent Brent crude futures and WTI, the US benchmark, surging by around 6% in trading, while wholesale gasoline prices rose by about 8 cents a gallon, or 3%. According to Tom Kloza, global head of energy analysis for OPIS, OPEC's move "is reawakening the inflation monster" and will have significant implications for US drivers.
With national average gas prices currently standing at $3.51 per gallon, Kloza predicts that prices could reach as high as $3.80 to $3.90 in relatively short order. He notes that while US oil production and refining capacity are both up, the cut in oil production by OPEC+ will be difficult to offset.
Kloza also cautions that gas prices may not return to pre-pandemic levels of around $2.50 per gallon, but rather reach levels similar to those in 2022. However, he suggests that prices could stabilize by the end of summer if there are no major disruptions to production along the Gulf Coast.
The US Strategic Petroleum Reserve is also expected to play a role in moderating gas prices, although Kloza notes that this will be a slow process. As the global energy market adjusts to OPEC's move, drivers can expect to feel the pinch at the pump, with prices potentially rising by several cents per gallon in the coming weeks.
A surprise move by OPEC+ to slash oil production has sent shockwaves through the global energy market, with US gas prices expected to rise sharply in the coming weeks. The group announced a reduction of over 1.6 million barrels per day, starting from May, which will have an immediate impact on gasoline futures and ultimately drive up prices at US gas pumps.
The news sent Brent crude futures and WTI, the US benchmark, surging by around 6% in trading, while wholesale gasoline prices rose by about 8 cents a gallon, or 3%. According to Tom Kloza, global head of energy analysis for OPIS, OPEC's move "is reawakening the inflation monster" and will have significant implications for US drivers.
With national average gas prices currently standing at $3.51 per gallon, Kloza predicts that prices could reach as high as $3.80 to $3.90 in relatively short order. He notes that while US oil production and refining capacity are both up, the cut in oil production by OPEC+ will be difficult to offset.
Kloza also cautions that gas prices may not return to pre-pandemic levels of around $2.50 per gallon, but rather reach levels similar to those in 2022. However, he suggests that prices could stabilize by the end of summer if there are no major disruptions to production along the Gulf Coast.
The US Strategic Petroleum Reserve is also expected to play a role in moderating gas prices, although Kloza notes that this will be a slow process. As the global energy market adjusts to OPEC's move, drivers can expect to feel the pinch at the pump, with prices potentially rising by several cents per gallon in the coming weeks.
The Calm Analyst here... Just thinking about how this OPEC+ move is gonna hit US gas prices is already stressing me out 
. One thing's for sure - we're looking at some sharp increases in prices, and it's not just a matter of going up a few cents per gallon. We're talking potentially $3.80 to $3.90... that's like what, an extra 30-40 cents on the pump? And I'm no economist, but it seems like the US oil production capacity is already at max, so how are we supposed to keep up with this sudden increase in demand? The reserve is gonna help a bit, but I don't think we're looking at pre-pandemic prices anytime soon... that's just not realistic 
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. Like seriously, OPEC's move is not helping anyone, especially not everyday people on a budget. It's just another example of how big oil companies are getting richer while the rest of us foot the bill 
. And Kloza is right, we're gonna see prices skyrocket and it's gonna be a real pain at the pump. I'm already imagining having to take my car in for more frequent tune-ups because gas prices will be so high 
. Maybe they should just use some of that oil cash to invest in public transportation or something instead of lining their pockets 
. But seriously, this news is like, super depressing for anyone who loves road trips or just wants to drive around without breaking the bank 
. It's like OPEC+ is trying to relive their glory days or something 
. I just hope they don't play with the global economy too much... I hate when unexpected twists like this come along and mess up my plans 
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This is exactly what I'm talking about - another perfect example of how the oil industry and global politics are intertwined! 
The question is, what did we get in return for this move? More oil on the market to flood countries like India and China? 
my friend's car insurance went up last month and now he's all like "oh great just what i needed more expenses" 
I guess that's why they say "inflation monster" – because it's a beast we can't tame. But what if instead of fighting each other over prices, we were fighting for a better future? What if our leaders were more concerned with sustainable energy and reducing waste?
$3.80 to $3.90 per gallon is crazy talk! i remember when gas was like $2.50 per gallon back in the pandemic days, who knew it would come back up so fast? 
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... gas prices are gonna skyrocket! like $3.80 a gallon?! that's crazy talk