Gas Prices Could Hit $4 a Gallon This Summer, Thanks to OPEC Slowdown - CNET
Gas Prices Could Hit $4 a Gallon This Summer, Thanks to OPEC Slowdown - CNET
OPEC+ announced on Sunday that it will cut oil output by more than a million barrels a day through the end of 2023, a move that could have a real impact on gas prices in the US.
The oil-producing alliance, which includes Saudia Arabia, Russia and Iran, is reducing production by 1.2 million barrels starting in May, equal to about 1% less oil on the market.
The move comes just after Russia decided to limit oil production by 500,000 barrels a day through the end of 2023.
Gas prices are already expected to increase with the upcoming summer travel season, and the OPEC+ decision could ratchet them up even higher.
"I certainly think there's going to be upward pressure on prices as a result of these production cuts," Patrick DeHaan, lead petroleum analyst for GasBuddy, told ABC News.
On Twitter, DeHann said he expected that the slowdown will cause oil prices to rise $3 to $6 a barrel. At the pump, he added, "the initial effect will be limited to a ballpark of 5 to 15 cents a gallon."
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Peter McNally, an industrial materials and energy expert for Third Bridge, predicts a steeper increase of 30 cents per gallon. If McNally is right, gas prices could reach $4 a gallon by summer.
On Tuesday, the national average for a gallon of gas was $3.51, according to AAA. That's up 11 cents from last month, but far less than the $4.19 average from this time last year.
In June 2022, regular gasoline hit an all-time high of $5.02 a gallon.
OPEC+ nations previously cut their output by 2 million barrels per day in October 2022, a move the White House called "shortsighted."
The Biden administration has similarly criticized the new announcement, which Treasury Secretary Janet Yellen called "unconstructive."
"We don't think cuts are advisable at this moment, given market uncertainty -- and we've made that clear," National Security Council spokesman John Kirby said Monday.