OPEC+ Unleashes Price Hike: US Gas Prices on Track for Sharp Rise
The Organisation of the Petroleum Exporting Countries (OPEC) + its allies has made a surprise move to slash oil production by more than 1.6 million barrels per day, effective May to December. This reduction in global crude supply is set to send gas prices soaring at US pumps.
As a result of this production cut, Brent crude futures and WTI, the US benchmark, surged about 6% in Monday's trading, while RBOB, the wholesale gasoline price, rose by around 8 cents per gallon – a 3% increase. This sharp spike in oil prices is expected to be felt more quickly at gas stations due to the direct impact on gasoline futures.
Energy analyst Tom Kloza from OPIS notes that OPEC's decision "is reawakening the inflation monster." The White House, he believes, will be "majorly pissed" over this move. Kloza forecasts US gas prices could reach $3.80 to $3.90 per gallon in a relatively short period.
While some may see this as an opportunity for prices to drop after recent spikes, experts argue that the current market dynamics make it unlikely. The national average for US gas prices stood at $3.51 on Monday, and Kloza predicts this price could reach $4.00 soon.
The average US regular gas price a year ago was around $4.19 per gallon due to Russia's invasion of Ukraine, which caused significant disruptions to the global energy market. The subsequent release of oil from the US Strategic Petroleum Reserve and concerns about recession also contributed to a steady decline in prices.
However, with OPEC+ reducing supply, there is no guarantee that prices will continue to fall. Kloza points out that while the US plans additional releases from the SPR, which could help mitigate price hikes, it may not be enough to offset the impact of this production cut. The global energy market's response to such a move suggests that OPEC+ has the ability and motivation to implement such cuts.
As the summer approaches, experts warn that US drivers may see prices return above last year's levels if storms affect production in the Gulf Coast region. With the national average currently below $3.53 per gallon from February 2022, when Russia invaded Ukraine, it is clear that OPEC+ has unleashed a price hike that will be felt at US gas pumps for some time to come.
The Organisation of the Petroleum Exporting Countries (OPEC) + its allies has made a surprise move to slash oil production by more than 1.6 million barrels per day, effective May to December. This reduction in global crude supply is set to send gas prices soaring at US pumps.
As a result of this production cut, Brent crude futures and WTI, the US benchmark, surged about 6% in Monday's trading, while RBOB, the wholesale gasoline price, rose by around 8 cents per gallon – a 3% increase. This sharp spike in oil prices is expected to be felt more quickly at gas stations due to the direct impact on gasoline futures.
Energy analyst Tom Kloza from OPIS notes that OPEC's decision "is reawakening the inflation monster." The White House, he believes, will be "majorly pissed" over this move. Kloza forecasts US gas prices could reach $3.80 to $3.90 per gallon in a relatively short period.
While some may see this as an opportunity for prices to drop after recent spikes, experts argue that the current market dynamics make it unlikely. The national average for US gas prices stood at $3.51 on Monday, and Kloza predicts this price could reach $4.00 soon.
The average US regular gas price a year ago was around $4.19 per gallon due to Russia's invasion of Ukraine, which caused significant disruptions to the global energy market. The subsequent release of oil from the US Strategic Petroleum Reserve and concerns about recession also contributed to a steady decline in prices.
However, with OPEC+ reducing supply, there is no guarantee that prices will continue to fall. Kloza points out that while the US plans additional releases from the SPR, which could help mitigate price hikes, it may not be enough to offset the impact of this production cut. The global energy market's response to such a move suggests that OPEC+ has the ability and motivation to implement such cuts.
As the summer approaches, experts warn that US drivers may see prices return above last year's levels if storms affect production in the Gulf Coast region. With the national average currently below $3.53 per gallon from February 2022, when Russia invaded Ukraine, it is clear that OPEC+ has unleashed a price hike that will be felt at US gas pumps for some time to come.
they're gonna hit like $3.80 - $3.90 per gallon? that's crazy! i remember when russia invaded ukraine, gas prices were way lower, around $4.19 last year... but now opec+ is cutting supply and it's like, game over for drivers 
️ Like, can you believe what's happening with oil prices? I mean, 6% surge in just one day?! That's insane! Gas prices are gonna hit $3.80-$3.90 a gallon soon? Whoa, that's like, getting back to pre-Ukraine levels 
. I don't think prices will drop anytime soon, though. The market dynamics are crazy right now. Summer's coming and Gulf Coast storms could make things even worse... this is gonna be a wild ride! 
I'm seeing a lot of folks saying "price hike" on the news about OPEC+, but shouldn't we be calling it an "oil price surge"? Either way, it's not looking good for US drivers - $3.80-$4.00 per gallon is no joke! 
i think its all about supply and demand, if less oil hits the market, it means there's less supply, so you gotta pay more for it, simple math. but honestly, with all these price hikes in recent times, people are getting used to it, like they should've been paying $3 a gallon last year instead of $4! 
anyway, i think its kinda inevitable that gas prices will reach those levels again if opec keeps cutting production...
. i think $3.80 per gallon is like, way too high. its already killing small businesses that are barely scraping by as it is. dont even get me started on the impact on low income households 
. we should be worried about inflation, not some oil tycoons getting richer 
with opec+ slashing oil production by over 1.6 million barrels per day, it's only a matter of time before we see prices SOAR! I'M TALKING $3.80 TO $4.00 PER GALLON IN NO TIME!!! 
but now opec+ is like "yo we're cutting production" and everyone's all like "wahhh" 
i mean, opec+ has the power to control the price hike and they're taking advantage of it 
meanwhile, all you gas station owners are like "yaaas we get to charge more money" 
opec+ is killin it apparently they're reducin production by 1.6 million barrels per day which is crazy talk! 
i remember last year we were payin around $4.19 per gallon due to russia invadin ukraine