An unexpected decision by OPEC and its allies to reduce oil production will have a direct impact on gas prices in the US. The group, known as OPEC+, revealed on Sunday that it would decrease oil production by over 1.6 million barrels a day starting in May through the end of the year. This news caused both the Brent crude futures and WTI to increase by approximately 6% in trading on Monday.
This announcement also affected gasoline futures immediately, which will result in a faster increase for US drivers compared to the rise in oil prices. RBOB, the primary wholesale gasoline price, surged by about 8 cents a gallon, or 3%, during morning trading.
The national average gas price in the US was reported at $3.51 on Monday, as per AAA. With the recent move by OPEC, it is anticipated to rise to $3.80 to $3.90 in the near future. Despite this increase, it is not expected to reach the highs of $5 a gallon, with experts suggesting a potential rise above prices from the same period last year.
One factor preventing gas prices from reaching record levels is the additional releases from the US Strategic Petroleum Reserve and increased US oil production and refining capacity. However, the 1.6 million barrels per day cut in oil production by OPEC+ will pose challenges in maintaining supply.
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