OPEC and its allies have made a surprising decision to slash oil production, which will impact US gas pumps very soon. The group, known as OPEC+, revealed on Sunday that they would reduce oil production by over 1.6 million barrels a day starting in May and continuing through the end of the year. This news caused both Brent crude futures and WTI to increase by about 6% in trading on Monday.
The announcement of the production cut also had an immediate effect on gasoline futures, which will be reflected in US driver’s prices much faster than the rise in oil prices. RBOB, the main wholesale gasoline price, went up by approximately 8 cents a gallon, or about 3%, in morning trading.
This move by OPEC is anticipated to significantly affect gas prices in the US. The national average for gas prices in the US was at $3.51 on Monday, according to AAA. Experts believe it could climb to $3.80 to $3.90 quickly due to OPEC’s decision.
Despite the potential increase, it is unlikely that gas prices will reach the record levels of 2022. The current US gas prices are just below what they were on the day before Russia’s invasion of Ukraine. One factor helping to prevent prices from skyrocketing to previous highs is the increase in US oil production and refining capacity, as well as planned releases of oil from the Strategic Petroleum Reserve.
For small businesses and gig workers facing financial challenges or unexpected expenses, a simple MCA from our established financial services company can provide fast financing with no credit checks. Don’t miss out on this easy MCA that can help you navigate uncertain times.