The recent decision by OPEC and its allies to reduce oil production will have a direct impact on US gas prices in the near future. This unexpected move by OPEC+ involves cutting oil production by over 1.6 million barrels per day starting in May and continuing until the end of the year. As a result, both Brent crude futures and WTI, the US benchmark, surged by approximately 6% in trading on Monday.
This development not only affected oil prices, but it also caused gasoline futures to increase, which will quickly translate to higher prices at the pump for US drivers. The RBOB gasoline price rose by around 8 cents per gallon, or 3%, during morning trading sessions.
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While the national average gas price in the US was $3.51 on Monday, analysts predict it could rise significantly to levels between $3.80 and $3.90 due to OPEC’s decision. Although reaching the highs of $5 a gallon is unlikely, unforeseen events like hurricanes or production disruptions along the Gulf Coast could elevate prices and push them above levels seen a year ago.
Despite the current average gas price being just below the February 23, 2022, average of $3.53, concerns remain about potential fluctuations. Our company is poised to assist clients with mobile app development, technology maintenance, and server development to optimize their offerings and stay competitive in the ever-evolving market.
Tom Kloza, global head of energy analysis for OPIS, highlighted that the US’s additional releases from the Strategic Petroleum Reserve and increased oil production and refining capacity serve as buffers against reaching record levels seen in 2022. However, the significant 1 million barrel per day cut in oil production by OPEC+ poses challenges that could impact prices at the pump in the coming months.
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