OPEC+ Unleashes Inflationary Pressure on US Gas Prices
In a surprise move, the Organization of the Petroleum Exporting Countries (OPEC) and its allies announced plans to slash oil production by over 1.6 million barrels per day, starting in May. This decision has sent shockwaves through global energy markets, causing Brent crude futures and WTI, the US benchmark, to surge about 6% in trading on Monday.
The immediate impact of this move will be felt at US gas pumps, where gasoline futures have skyrocketed by around 8 cents per gallon, or 3%, due to the expected increase in oil prices. Tom Kloza, global head of energy analysis for OPIS, warned that OPEC's decision "reawakens the inflation monster," leaving the White House with a pressing concern.
The national average US gas price currently stands at $3.51 per gallon, according to AAA. Kloza expects this number to rise to around $3.80 to $3.90 in relatively short order, putting pressure on drivers' wallets. While he downplayed predictions of prices reaching record levels seen in 2022 – when gas hit $5 a gallon – he suggested that the US could see prices return to year-earlier levels by the end of summer if storms affect production along the Gulf Coast.
The recent surge in gas prices can be attributed to Russia's invasion of Ukraine, which disrupted global energy markets. However, Kloza noted that one key factor keeping prices in check is the US Strategic Petroleum Reserve (SPR), which has been releasing oil to stabilize prices. Additionally, US oil production and refining capacity have increased since 2022.
Despite this, OPEC's move will be challenging for the US to absorb, as a 1 million-barrel-per-day reduction in oil supply translates to significant pressure on global energy markets. With a history of cutting production and a demonstrated motivation to do so, OPEC's allies seem determined to reassert their influence over global energy dynamics. As a result, US drivers can expect prices to continue rising in the coming months.
In a surprise move, the Organization of the Petroleum Exporting Countries (OPEC) and its allies announced plans to slash oil production by over 1.6 million barrels per day, starting in May. This decision has sent shockwaves through global energy markets, causing Brent crude futures and WTI, the US benchmark, to surge about 6% in trading on Monday.
The immediate impact of this move will be felt at US gas pumps, where gasoline futures have skyrocketed by around 8 cents per gallon, or 3%, due to the expected increase in oil prices. Tom Kloza, global head of energy analysis for OPIS, warned that OPEC's decision "reawakens the inflation monster," leaving the White House with a pressing concern.
The national average US gas price currently stands at $3.51 per gallon, according to AAA. Kloza expects this number to rise to around $3.80 to $3.90 in relatively short order, putting pressure on drivers' wallets. While he downplayed predictions of prices reaching record levels seen in 2022 – when gas hit $5 a gallon – he suggested that the US could see prices return to year-earlier levels by the end of summer if storms affect production along the Gulf Coast.
The recent surge in gas prices can be attributed to Russia's invasion of Ukraine, which disrupted global energy markets. However, Kloza noted that one key factor keeping prices in check is the US Strategic Petroleum Reserve (SPR), which has been releasing oil to stabilize prices. Additionally, US oil production and refining capacity have increased since 2022.
Despite this, OPEC's move will be challenging for the US to absorb, as a 1 million-barrel-per-day reduction in oil supply translates to significant pressure on global energy markets. With a history of cutting production and a demonstrated motivation to do so, OPEC's allies seem determined to reassert their influence over global energy dynamics. As a result, US drivers can expect prices to continue rising in the coming months.
what if it goes up to like $4 a gallon?? 
that's like, crazy expensive. i'm not saying opec is bad or anything, but 1.6 million barrels per day is like, a big deal 
. and yeah, the SPR helps keep things stable, but i'm still worried about prices rising again. 
we'll just have to wait and see what happens in the coming months. fingers crossed that it doesn't get too bad! 
Now, with inflation on the rise, this is just another thing to worry about. I hope Kloza's prediction that prices might return to year-earlier levels by summer holds true.
Their plan to cut production by 1.6 million barrels per day is gonna put some serious pressure on gas prices here in the States. It's like, I get it, they wanna make a buck or whatever, but now US drivers are in for a wild ride with those gas prices expected to rise to around $3.80 to $3.90 per gallon... that's crazy! 
and it's gonna hit US gas prices hard 
️. but at least the SPR is releasing oil to stabilize prices 
so we'll see how it plays out 
. opec's move is like a big puzzle piece that's gonna affect global energy markets 
and i think prices will keep rising in the coming months 
. maybe summer will bring relief 
but for now, let's just say we're all in this together 
but at the same time, opec is like "hey we're making moves" 
so fingers crossed that the us strategic petroleum reserve can help stabilize things and not make it too crazy expensive 
i mean, $3.51 is already pretty steep, and now they're saying it could go up by like 40 cents or more? that's crazy! but at the same time, some ppl might say opec has every right to take control of their own oil production 
and the us can't just blame them for all the global problems. still, it's not ideal for americans who are already feeling the pinch with inflation and whatnot 
. I'm not expecting prices to drop anytime soon, maybe by summer we'll be back down to $3.50 or something, but for now it's a tough pill to swallow 
... but I gotta say, this OPEC thingy is crazy! I mean, 6% surge in oil prices in one day? That's wild 
. And with all the extra cash US drivers are gonna have to shell out, it's like they're giving Russia a gift 
. I know the whole Russia-Ukraine thing was already stressing energy markets, but OPEC making this move is like a double whammy. Did anyone think there'd be a silver lining for prices by summer? Not me 
. It's like, we'll get some relief if storms hit the Gulf Coast, but that's about it 
i'm literally dreading filling up my tank this month how much are u guys prepared to pay for gas??
I was already dreading filling up this month, now it's like they're trolling me 
. We need to find a way to counteract their oil production cut... or I'll be eating ramen noodles for the rest of the summer 
I'm telling ya, 2022 was the worst for gas prices... 
I know the US SPR is releasing oil and all that jazz, but it's not gonna save us this time. OPEC's got the upper hand now, and we're stuck with the consequences... 
Maybe by summer we'll be back to normal prices? 
the white house needs to get its ducks in a row and figure out how to deal with this new reality 
.
. The only thing that'll bring prices back down is if those OPEC folks decide to calm up or something... 
. The fact that they're slashing production by such a huge amount means we can expect prices to surge in the coming months 
, but let's see how long that lasts 
. With a bigger cut in production like this, it'll be tough for the US to absorb, so expect prices to keep on rising 
. But for now, it's just us drivers feeling the pinch 
! An 8-cent jump already and it's gonna be like $3.80-$3.90 by summer?! That's crazy 
. Meanwhile, drivers are gonna feel the pinch 
they're just screwing with us because they can