OPEC+'s Surprise Move Raises US Gas Prices, Inflation Fears
In a surprise move, OPEC+ announced on Sunday that it would slash oil production by over 1.6 million barrels per day starting in May and running through the end of the year. The decision sent shockwaves throughout the energy market, causing Brent crude futures to rise by about 6% and US gasoline futures to surge by 8 cents a gallon. This sudden hike in fuel prices will undoubtedly have a ripple effect on inflation, with some analysts warning that it could reignite the "inflation monster."
According to Tom Kloza, global head of energy analysis for OPIS, which tracks gas prices for AAA, OPEC's move is a significant development that will alter the calculus for policymakers. The White House has expressed concerns over the impact of this move on inflation, and Kloza believes that US gas prices could rise to $3.80 to $3.90 in relatively short order.
The national average for US gas prices stood at $3.51 on Monday, which is just below the record high of $3.53 set on February 23, 2022, the day before Russia's invasion of Ukraine. However, Kloza notes that one major factor keeping prices from surging to record levels is the planned release of oil from the US Strategic Petroleum Reserve and the increase in US oil production and refining capacity.
While a cut of 1 million barrels per day of oil by OPEC+ may seem small, it could have a significant impact on global energy markets. Kloza believes that OPEC has the ability to make this cut and seems motivated to do so. As a result, fuel prices are likely to rise, particularly for US drivers, who will feel the effects much more quickly than the spike in oil prices.
The question on everyone's mind is whether the current surge in gas prices will be short-lived or if it could lead to higher inflation. While Kloza believes that prices won't reach $4 a gallon and that the average US regular gas price will fall back below $4 later this year, he does warn that there is still a possibility of a hurricane or other storms affecting production along the Gulf Coast, which could drive prices back up.
As the energy market continues to navigate these shifting dynamics, one thing is clear: OPEC+'s surprise move has sent shockwaves throughout the industry and will have far-reaching consequences for US gas prices and inflation.
In a surprise move, OPEC+ announced on Sunday that it would slash oil production by over 1.6 million barrels per day starting in May and running through the end of the year. The decision sent shockwaves throughout the energy market, causing Brent crude futures to rise by about 6% and US gasoline futures to surge by 8 cents a gallon. This sudden hike in fuel prices will undoubtedly have a ripple effect on inflation, with some analysts warning that it could reignite the "inflation monster."
According to Tom Kloza, global head of energy analysis for OPIS, which tracks gas prices for AAA, OPEC's move is a significant development that will alter the calculus for policymakers. The White House has expressed concerns over the impact of this move on inflation, and Kloza believes that US gas prices could rise to $3.80 to $3.90 in relatively short order.
The national average for US gas prices stood at $3.51 on Monday, which is just below the record high of $3.53 set on February 23, 2022, the day before Russia's invasion of Ukraine. However, Kloza notes that one major factor keeping prices from surging to record levels is the planned release of oil from the US Strategic Petroleum Reserve and the increase in US oil production and refining capacity.
While a cut of 1 million barrels per day of oil by OPEC+ may seem small, it could have a significant impact on global energy markets. Kloza believes that OPEC has the ability to make this cut and seems motivated to do so. As a result, fuel prices are likely to rise, particularly for US drivers, who will feel the effects much more quickly than the spike in oil prices.
The question on everyone's mind is whether the current surge in gas prices will be short-lived or if it could lead to higher inflation. While Kloza believes that prices won't reach $4 a gallon and that the average US regular gas price will fall back below $4 later this year, he does warn that there is still a possibility of a hurricane or other storms affecting production along the Gulf Coast, which could drive prices back up.
As the energy market continues to navigate these shifting dynamics, one thing is clear: OPEC+'s surprise move has sent shockwaves throughout the industry and will have far-reaching consequences for US gas prices and inflation.
. The sudden cut in oil production from OPEC+ does seem like a strategic move to influence global energy markets, and it's clear that they're motivated to make an impact 
. However, the ripple effect on US gas prices and inflation is a concern that needs to be taken seriously 
.
. The White House has expressed concerns about inflation, and for good reason – a surge in fuel prices can have far-reaching consequences for the economy 
.
. As we head into the summer driving season, higher gas prices could become an even bigger issue for US drivers 
. Whether this surge is short-lived or leads to a broader inflationary trend remains to be seen 
.
. As we navigate these shifting dynamics, it's essential to stay vigilant and monitor the situation closely 
.
]
]
]
. i don't get why they gotta cut production in the first place, it's not like oil is going anywhere 
. and now us drivers are gonna feel the pinch, gas prices are already through the roof $3.51 is like, crazy high 
. tom Kloza makes a good point that opec+ has the power to make moves like this and they're not afraid to do it 
. And what really gets me is the White House is just gonna sit there and do nothing about it... they're all like "oh, we'll just wait and see" 
. Meanwhile, regular people are just gonna have to shell out more cash for gas because of OPEC+'s harebrained scheme 
. And don't even get me started on the inflation monster coming back to life... it's only a matter of time before we're all paying the price 
.
It's like, what's really going on here? Is this some kind of cartel thing? I'm starting to think there's more to it than meets the eye... 
Not to mention the potential impact on inflation. It's already been a wild ride with global markets, and we don't need this added uncertainty. What's next? 
... what if it gets worse? 
That's just too much for anyone to handle. And Kloza says there's still a chance prices could go back down if some storms affect production 
. I'm not saying it's gonna be catastrophic or anything (knock on wood 
), but still... we're talking about $3.80-$3.90 per gallon here! That's some serious cash for the average American 
, but this is just getting intense 
.
. Still, 8 cents a gallon might feel like a lot to some people, especially with the national average already at $3.51 
.
. One country's energy policy can have far-reaching effects on another 
. I'm just curious to see how this whole thing plays out 
, filled with oil. The tap is turned to "down", reducing the flow of oil into the market. At first, it's just a small trickle 
, but as time passes, the water level starts to rise 
. That's kind of what's happening here.
. It's like taking a tiny bucket out of the bathtub - it might not fill it up completely, but it'll still affect the water level significantly 
.
.
.
... that's always a wild card.
it's like, i get that oil production needs to be managed or whatever but 6% rise in fuel prices is still pretty steep 
. But hey, it seems like OPEC+ is trying to get back in control of the market and make some quick cash