Oil-producing nations within the OPEC+ alliance have announced a surprise reduction in oil production, which is expected to send US gas prices soaring in the coming months. The move, effective from May to December, will result in a daily cut of over 1.6 million barrels, sparking fears that inflation may soon re-emerge as a major issue.
The news has already had an immediate impact on energy markets, with oil futures surging by around 6% and gasoline prices increasing by about 8 cents per gallon. Industry experts predict that this will be passed on to US consumers, driving up the national average gas price to potentially reach $3.80 to $3.90 per gallon in the short term.
Energy analyst Tom Kloza warns that the White House is likely to be "shocked and major-time pissed" by this development, as it alters the economic calculus for a while. According to Kloza, US drivers could see prices return above year-earlier levels, especially if production disruptions along the Gulf Coast worsen due to natural disasters.
The current average gas price of $3.51 is only slightly below the record-high level of $3.53 on February 23, 2022, just before Russia's invasion of Ukraine sent energy markets reeling. Kloza attributes this difference to the US Strategic Petroleum Reserve releasing more oil and an increase in domestic production and refining capacity.
However, the prospect of OPEC+ cutting oil production by such a significant amount has left many experts concerned that prices will struggle to recoup this loss. Kloza notes that the US plans additional releases from the SPR and its own oil production and refining capacity are up, but these measures may not be enough to offset the impact of the reduced oil supply.
As a result, gas prices may soon take a sharp turn upwards, forcing policymakers and consumers alike to confront the reality of inflation re-emerging as a major economic concern.
The news has already had an immediate impact on energy markets, with oil futures surging by around 6% and gasoline prices increasing by about 8 cents per gallon. Industry experts predict that this will be passed on to US consumers, driving up the national average gas price to potentially reach $3.80 to $3.90 per gallon in the short term.
Energy analyst Tom Kloza warns that the White House is likely to be "shocked and major-time pissed" by this development, as it alters the economic calculus for a while. According to Kloza, US drivers could see prices return above year-earlier levels, especially if production disruptions along the Gulf Coast worsen due to natural disasters.
The current average gas price of $3.51 is only slightly below the record-high level of $3.53 on February 23, 2022, just before Russia's invasion of Ukraine sent energy markets reeling. Kloza attributes this difference to the US Strategic Petroleum Reserve releasing more oil and an increase in domestic production and refining capacity.
However, the prospect of OPEC+ cutting oil production by such a significant amount has left many experts concerned that prices will struggle to recoup this loss. Kloza notes that the US plans additional releases from the SPR and its own oil production and refining capacity are up, but these measures may not be enough to offset the impact of the reduced oil supply.
As a result, gas prices may soon take a sharp turn upwards, forcing policymakers and consumers alike to confront the reality of inflation re-emerging as a major economic concern.
I'm getting worried about this one... with oil production dropping like that, you can bet your last dollar gas prices are gonna skyrocket 
in no time. We're already seeing it happen and I don't think the government's plans to release more oil from the SPR will be enough to keep us safe from inflation 
. My grandkids are always telling me about how expensive things get when they grow up and now I'm starting to believe them... it's like, ouch 
. I think it's good that OPEC+ is taking action to stabilize prices, but 1.6 million barrels cut at once? That's a big drop 
. We'll see how this plays out over the next few months 
. One thing for sure, though: if prices do spike, we'll be hearing about it from every direction 
.
, like can't these OPEC+ folks just chill for a sec? 
They go ahead and reduce production by 1.6 MILLION barrels and suddenly we're all worried about inflation returning? 
Come on guys, it's not that hard to see the writing on the wall here... prices are gonna go up, people are gonna get hurt, but honestly who cares at this point? 
We're already stuck in a cycle of price volatility and nobody knows what's gonna happen next. And don't even get me started on Tom Kloza being all "shocked and major-time pissed" by this news... like dude, it's OPEC+ we're talking about here! 
They've been doing this dance for years, just adjusting production to suit their own interests. It's not that surprising when they pull the rug out from under us. But noooo, now everyone's all freaked out because gas prices might go up... poor babies 
.
. I'm sure the White House has some tricks up their sleeve too 
. It's also worth noting that prices are already pretty high, so it's not like we're going from $3 to $30 overnight 
. We could be looking at a silver lining here 
.
?
OPEC+ just pulled the plug on global energy supplies 
. Industry experts are all like "concerned" and "scared" 
, especially if Gulf Coast production gets further disrupted by natural disasters 
. I'm not sure how much the US can do to offset this, but they're gonna try to release more oil from that SPR 
. Still, it's hard to see prices recouping with OPEC+ cutting so much supply 
And Tom Kloza is all worried about the White House being "shocked and major-time pissed" 
like what's new?
gotta feel for the average joe who's already strugglin' with expenses 
oil prices goin up means more cost for everything else too, food, housing, the whole shebang 
and energy analyst Tom Kloza just dropped some fire stats - gas prices are like 6% higher and the SPR releasing more oil might not even make a dent 
what can the gov do tho? maybe they could help with some subsidies or somethin to ease the pain 