US Gas Prices Poised for Sharp Increase as OPEC+ Unleashes 'Inflation Monster'
A surprise move by the Organization of the Petroleum Exporting Countries (OPEC+) to slash oil production has sent shockwaves through global energy markets, sending US gas prices surging. The group announced a cut of over 1.6 million barrels a day starting in May, which will be felt at US gas pumps almost immediately.
The news sparked a significant spike in Brent crude futures and WTI, the US benchmark oil price, up about 6% in trading on Monday. As a result, gasoline futures also jumped, with RBOB, the most closely watched wholesale gasoline price, rising by about 8 cents a gallon, or 3%, in morning trading.
According to Tom Kloza, global head of energy analysis for OPIS, which tracks gas prices for AAA, OPEC's move will "reawaken the inflation monster" and put pressure on US drivers. The White House is likely to be "shocked and major-time pissed" by this development, as it alters the calculus for fuel prices in the country.
As of Monday, the national average for US gas prices stood at $3.51, according to AAA, with Kloza predicting that prices could reach up to $3.80 to $3.90 in relatively short order. However, he also noted that while US oil production and refining capacity are both up, a cut of 1 million barrels a day of oil by OPEC+ will be challenging to offset.
Kloza highlighted that despite this, OPEC's ability to cut production and their apparent motivation to do so suggest that they have the capability to impact global energy markets. The average US regular gas price a year ago stood at $4.19 a gallon in the wake of Russia's invasion of Ukraine, which caused significant disruptions to global energy markets.
While prices are unlikely to reach the record levels of 2022, when oil prices surged due to the conflict, Kloza noted that US drivers could see prices return to year-earlier levels if there is an impact on production along the Gulf Coast.
A surprise move by the Organization of the Petroleum Exporting Countries (OPEC+) to slash oil production has sent shockwaves through global energy markets, sending US gas prices surging. The group announced a cut of over 1.6 million barrels a day starting in May, which will be felt at US gas pumps almost immediately.
The news sparked a significant spike in Brent crude futures and WTI, the US benchmark oil price, up about 6% in trading on Monday. As a result, gasoline futures also jumped, with RBOB, the most closely watched wholesale gasoline price, rising by about 8 cents a gallon, or 3%, in morning trading.
According to Tom Kloza, global head of energy analysis for OPIS, which tracks gas prices for AAA, OPEC's move will "reawaken the inflation monster" and put pressure on US drivers. The White House is likely to be "shocked and major-time pissed" by this development, as it alters the calculus for fuel prices in the country.
As of Monday, the national average for US gas prices stood at $3.51, according to AAA, with Kloza predicting that prices could reach up to $3.80 to $3.90 in relatively short order. However, he also noted that while US oil production and refining capacity are both up, a cut of 1 million barrels a day of oil by OPEC+ will be challenging to offset.
Kloza highlighted that despite this, OPEC's ability to cut production and their apparent motivation to do so suggest that they have the capability to impact global energy markets. The average US regular gas price a year ago stood at $4.19 a gallon in the wake of Russia's invasion of Ukraine, which caused significant disruptions to global energy markets.
While prices are unlikely to reach the record levels of 2022, when oil prices surged due to the conflict, Kloza noted that US drivers could see prices return to year-earlier levels if there is an impact on production along the Gulf Coast.
. I mean, I get that they wanna keep prices under control or whatever but 1.6 million barrels a day? That's like, a big deal! The White House is gonna be all bent outta shape about this, for sure 
. I'm already seeing prices rise like crazy on gas futures and it's only May... what's next? A full-on inflation monster, huh? 
Gas prices in the US about to get a serious boost! 
I'm thinking maybe it's time for people to rethink their road trips and consider alternative modes of transport, like biking or trains? 
Or we could just accept that it's part of life now and start looking into more energy-efficient vehicles 
. Not sure what the solution is but one thing's for sure, my wallet is not going to thank me 
I'm talking 3.80 or even higher in no time, and it's not just the oil price that's gonna make drivers go crazy, it's the inflation monster 
that opec+ unleashed. I'm all for some cost savings, but not at the expense of our daily commute. US drivers are already feeling the pinch with prices around $3.51, can't we just keep it steady for once? 
! and with the inflation monster gettin' looser, prices are gonna rise up like a big ol' graph 
! OPEC+ is playin' it cool, but this could get outta hand 
anyways its gonna be a bumpy ride for all of us driving around trying to fill up on the cheap 
. Maybe some kind of compromise or alternative solution could be explored instead? 
. They're basically asking for trouble with this move... 1.6 million barrels a day is a big chunk of oil 
. I don't think it's gonna be easy to offset that loss with US oil production and refining capacity 
. Prices are gonna go up, and we'll see inflation take a bite out of our wallets 
And yeah, prices might go up a bit, but it's not like we're talking about the apocalypse here... or are we? 
. As we're already dealing with inflation, this move just adds fuel to the fire 
! And who knows, maybe this is the wake-up call we need to invest in more sustainable energy sources? It's not all doom and gloom 
. Plus, it's a chance for US drivers to save up some cash 
. I'm not gonna lie, though, it might be a bit of a squeeze for those on a tight budget 
. Still, I'll just have to get used to shelling out more cash for gas 
it's gonna be a wild ride. and yeah, the inflation monster is real 
.