OPEC and its allies’ unexpected decision to reduce oil production will have a direct impact on US gas prices. This move by the group, known as OPEC+, involves cutting oil production by over 1.6 million barrels per day from May until the end of the year. As a result, both Brent crude futures and WTI soared by roughly 6% in Monday’s trading session.
This development also immediately affected gasoline futures, with the repercussion being rapidly transferred to US motorists. The wholesale gasoline price, RBOB, experienced an increase of approximately 8 cents per gallon, reflecting a 3% rise in morning trading.
For the latest gas prices, the national average was $3.51 per gallon on Monday, as per AAA. Given this move by OPEC, industry experts foresee a potential spike in gas prices to around $3.80-$3.90 in the near future.
An essential factor in keeping gas prices from reaching the record levels of 2022 is the additional releases planned by the US from the Strategic Petroleum Reserve, coupled with increased US oil production and refining capabilities. However, with OPEC+ reducing oil production by 1 million barrels a day, it will be challenging to compensate for this decrease.
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