OPEC+ Announces Shocking Oil Production Cut, Sending US Gas Prices Soaring
In a move that has sent shockwaves through the energy market, OPEC+ announced on Sunday that it will slash oil production by over 1.6 million barrels per day starting in May and running through the end of the year. The production cut is expected to have an immediate impact on gasoline futures, leading to a surge in US gas prices.
The news sent Brent crude futures and WTI, the US benchmark, surging up about 6% in trading on Monday, with RBOB, the most closely watched wholesale gasoline price, jumping by about 8 cents per gallon or 3%. As a result, US drivers can expect to see their gas prices increase significantly in the coming weeks.
Energy expert Tom Kloza warned that OPEC's move is expected to "reawaken the inflation monster" and send US gas prices higher. He predicted that the national average for US gas prices could reach $3.80 to $3.90 in relatively short order, taking into account the recent spike in oil prices.
Kloza noted that while there are some factors that may help mitigate the impact of the production cut, such as additional releases from the US Strategic Petroleum Reserve and increased US oil production and refining capacity, a 1 million barrel-per-day cut will not be easy to make up. However, he also acknowledged that OPEC+ has the ability to reduce production and appears motivated to do so.
The move by OPEC+ comes at a time when global energy markets are already under pressure due to the ongoing Russia-Ukraine conflict and concerns about potential economic recession. With gasoline futures surging, US drivers can expect to see their gas prices increase significantly in the coming weeks. As Kloza warned, "We're not going to get back to $5 a gallon" but prices could return to year-earlier levels by the end of the summer if there are any significant disruptions to production along the Gulf Coast.
In a move that has sent shockwaves through the energy market, OPEC+ announced on Sunday that it will slash oil production by over 1.6 million barrels per day starting in May and running through the end of the year. The production cut is expected to have an immediate impact on gasoline futures, leading to a surge in US gas prices.
The news sent Brent crude futures and WTI, the US benchmark, surging up about 6% in trading on Monday, with RBOB, the most closely watched wholesale gasoline price, jumping by about 8 cents per gallon or 3%. As a result, US drivers can expect to see their gas prices increase significantly in the coming weeks.
Energy expert Tom Kloza warned that OPEC's move is expected to "reawaken the inflation monster" and send US gas prices higher. He predicted that the national average for US gas prices could reach $3.80 to $3.90 in relatively short order, taking into account the recent spike in oil prices.
Kloza noted that while there are some factors that may help mitigate the impact of the production cut, such as additional releases from the US Strategic Petroleum Reserve and increased US oil production and refining capacity, a 1 million barrel-per-day cut will not be easy to make up. However, he also acknowledged that OPEC+ has the ability to reduce production and appears motivated to do so.
The move by OPEC+ comes at a time when global energy markets are already under pressure due to the ongoing Russia-Ukraine conflict and concerns about potential economic recession. With gasoline futures surging, US drivers can expect to see their gas prices increase significantly in the coming weeks. As Kloza warned, "We're not going to get back to $5 a gallon" but prices could return to year-earlier levels by the end of the summer if there are any significant disruptions to production along the Gulf Coast.
I'm not loving this news at all 
. One more thing they're gonna do is make me pay more for my gas 
? I get that OPEC+ has a right to set their own prices and all, but can't we just work together as a global community to find solutions? 
It's already hard enough finding jobs and making ends meet without this added stress on our wallets. I swear, every time they cut back on oil production, gas prices go through the roof 
! Can't we just have some stability for once? 
and yeah, i can see why Kloza is saying we'll be seeing $3.80-$3.90 soon, that's not too shabby considering how much those gas prices were before... still sucks for us drivers tho 
But at the same time... like, if there are actually concerns about inflation and recession, maybe OPEC+ is onto something? 
Can we just wait and see how this plays out before getting too worked up? 
! i'm talking $3.80 to $3.90 a gallon!! that's crazy talk. i'm no expert but i think it's wild how one move can impact the entire energy market. Kloza is right tho, 1 million barrels per day is a big cut and it might take a while to make up for it. 
. Anyway, back to oil prices... I wonder if anyone has thought about the impact of all this on our food supply? Like, how much are oil companies going to charge for shipping fuel to grocery stores? 
. And now US gas prices are gonna be like $3.80 to $3.90?! That's crazy talk!