OPEC+ Announces Production Cut, Sending US Gas Prices Soaring
In a move that's expected to further fuel inflationary pressures in the US economy, the Organization of the Petroleum Exporting Countries (OPEC)+ has announced a surprise production cut of over 1.6 million barrels per day starting May and running through the end of the year.
The decision sent shockwaves through the global energy market, causing Brent crude futures to jump by around 6% in trading on Monday. US benchmark WTI also saw significant gains, with gasoline futures surging by approximately 8 cents a gallon - a 3% increase. This uptick is anticipated to be passed onto American drivers more rapidly than an increase in oil prices.
According to Tom Kloza, global head of energy analysis for OPIS, which tracks gas prices for AAA, the OPEC+ move essentially "rewakens the inflation monster" and will likely cause a significant spike in US gas prices. The White House is expected to be shocked by this development, as it alters their calculations regarding economic stability.
As of Monday, the national average for US gas prices stood at $3.51 per gallon, with Kloza predicting that prices could reach as high as $3.80-$3.90 in a relatively short period following the production cut. While there's still a possibility that prices won't surpass previous record levels of 2022 ($5 and $4), Kloza believes prices may eventually recover by the summer, particularly if there are disruptions to production along the Gulf Coast due to hurricanes or other storms.
Interestingly, gas prices did not reach such extreme levels before Russia's invasion of Ukraine in early 2022. At that time, the national average US regular gas price was $4.19 per gallon - a figure expected to decrease gradually over several months.
In a move that's expected to further fuel inflationary pressures in the US economy, the Organization of the Petroleum Exporting Countries (OPEC)+ has announced a surprise production cut of over 1.6 million barrels per day starting May and running through the end of the year.
The decision sent shockwaves through the global energy market, causing Brent crude futures to jump by around 6% in trading on Monday. US benchmark WTI also saw significant gains, with gasoline futures surging by approximately 8 cents a gallon - a 3% increase. This uptick is anticipated to be passed onto American drivers more rapidly than an increase in oil prices.
According to Tom Kloza, global head of energy analysis for OPIS, which tracks gas prices for AAA, the OPEC+ move essentially "rewakens the inflation monster" and will likely cause a significant spike in US gas prices. The White House is expected to be shocked by this development, as it alters their calculations regarding economic stability.
As of Monday, the national average for US gas prices stood at $3.51 per gallon, with Kloza predicting that prices could reach as high as $3.80-$3.90 in a relatively short period following the production cut. While there's still a possibility that prices won't surpass previous record levels of 2022 ($5 and $4), Kloza believes prices may eventually recover by the summer, particularly if there are disruptions to production along the Gulf Coast due to hurricanes or other storms.
Interestingly, gas prices did not reach such extreme levels before Russia's invasion of Ukraine in early 2022. At that time, the national average US regular gas price was $4.19 per gallon - a figure expected to decrease gradually over several months.
Oh man, this is crazy! I'm already feeling the pinch from these prices and now they're gonna cut production? It's like, aren't we in a recession or something? 
$3.51 to $3.80? That's just brutal! What's next, are they gonna make us pay more for everything else too? 
OPEC+ just cut oil production and now US gas prices are going through the roof 
Anyway, I think this is gonna be a bummer for some people who don't have a lot of cash to spare... maybe we should just switch to electric vehicles or something? 
just saw this news and gotta say, I'm kinda surprised it's gonna affect us like that 
also feels like the oil prices were already on the rise before this announcement 
what do u think about all this?
I'm totally on board with OPEC+ cutting production... NO WAIT, just kidding! 
That's never going to happen. Seriously though, it's kinda surprising that they're doing this now when the global economy is already struggling and inflation is getting out of control. But at the same time, shouldn't we be trying to increase production to help stabilize prices? I mean, $3.80-$3.90 a gallon is still pretty steep for most people... unless you're living in California or something 
It's like they're trying to recreate the '22 summer vibes... but not in a good way 
. I mean, $3.80-$3.90 per gallon? That's straight-up highway robbery! 
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I'm still trying to figure out how people afford gas these days... $3.51 a gallon is like, what, half my paycheck? 
, I'm not looking forward to driving around with those prices.
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now it seems like we're back to those levels... and then some? 
I recall summer 2022, we didn't even break $5 a gallon 
what's happened to the global economy? 
The OPEC+ production cut is literally going to break the bank for American drivers now. Like, come on, how much more are they gonna make off our misery? 
I'm not surprised though, all these oil-producing countries just wanna get richer and richer. It's like, hello, we're already feeling the pinch with inflation and whatnot. Can't they just keep prices low for once? 
think its gonna affect inflationary pressures in the us economy big time 
But for now, let's just say we're all in for a wild ride 
i mean i get it they wanna control prices but 8 cents a gallon is crazy that's like, an extra cost on top of everything else 
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