OPEC+ has unleashed a potent cocktail of high inflation, soaring oil prices, and potentially crippling US gas pump costs. The cartel's surprise move to slash global oil production by over 1.6 million barrels per day starting May is set to ratchet up Brent crude futures and the US benchmark WTI, with gasoline futures also taking an immediate hit.
According to Tom Kloza, global head of energy analysis for OPIS, OPEC's decision will "reawaken the inflation monster" in the US economy. With the national average gas price currently hovering at $3.51, Kloza predicts prices could surge as high as $3.80 or $3.90 per gallon over the coming weeks.
The cut in oil production is already having a profound impact on gasoline futures, which are expected to be passed down to US drivers faster than the corresponding spike in oil prices. RBOB, the most closely watched wholesale gasoline price, has shot up by 8 cents a gallon or 3% in morning trading.
Kloza warned that while gas prices may not reach record levels of $5 per gallon this time around, they could still surge to $4 in the near future. However, he cautioned that US drivers might be back above year-earlier prices come late summer if there is a hurricane or other storms disrupting production along the Gulf Coast.
It's worth noting that even at current levels, US gas prices are just shy of February 2022's average price of $3.53 per gallon, which was just a day before Russia's invasion of Ukraine sent shockwaves through global energy markets.
Kloza acknowledged that the US Strategic Petroleum Reserve (SPR) plans to release more oil could help temper price increases. Nonetheless, OPEC+ has demonstrated its ability to cut production and is motivated to do so.
According to Tom Kloza, global head of energy analysis for OPIS, OPEC's decision will "reawaken the inflation monster" in the US economy. With the national average gas price currently hovering at $3.51, Kloza predicts prices could surge as high as $3.80 or $3.90 per gallon over the coming weeks.
The cut in oil production is already having a profound impact on gasoline futures, which are expected to be passed down to US drivers faster than the corresponding spike in oil prices. RBOB, the most closely watched wholesale gasoline price, has shot up by 8 cents a gallon or 3% in morning trading.
Kloza warned that while gas prices may not reach record levels of $5 per gallon this time around, they could still surge to $4 in the near future. However, he cautioned that US drivers might be back above year-earlier prices come late summer if there is a hurricane or other storms disrupting production along the Gulf Coast.
It's worth noting that even at current levels, US gas prices are just shy of February 2022's average price of $3.53 per gallon, which was just a day before Russia's invasion of Ukraine sent shockwaves through global energy markets.
Kloza acknowledged that the US Strategic Petroleum Reserve (SPR) plans to release more oil could help temper price increases. Nonetheless, OPEC+ has demonstrated its ability to cut production and is motivated to do so.
I'm not sure what's more surprising, the fact that OPEC+ just slashed global oil production or that they're making me want to fill up my tank every hour on the hour...just kidding, sorta! 
Seriously though, with gas prices already near pre-Ukraine levels, it's wild that another spike is in the cards. Guess we'll just have to "pump" more money into our budgets, haha, I'm a comedic genius 
. On a serious note, though, it's gonna be interesting to see how the SPR's oil release affects prices. Fingers crossed for US drivers! 
. They're gonna unleash a bunch of inflation, high oil prices, and people are gonna be stuck in traffic with crazy gas prices 
. $3.80 or $3.90 per gallon? That's like, what even is that? Tom Kloza thinks it might reawaken the inflation monster, but honestly, I think it's just gonna get worse 
.
. Like, what's next? Gas prices skyrocketing to $4 a gallon? It's already near Feb 2022 levels, which were just before Russia invaded Ukraine 
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, but OPEC+ is like, totally not having it 
. They're all about cutting production and making a statement... or maybe just getting rich off our suffering 
. Either way, I'm over here hoping my wallet doesn't take the hit 
! $3.80/gallon? 
! The thing with OPEC+ is, they're like the main villain in this economic game, controlling oil production and raking it up as needed 
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. This "reawakening of the inflation monster" in the US economy is just a bunch of hype 
. By blaming their own move for inflation, they're trying to deflect attention from the real issue 
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. The actual numbers don't add up 
. Tom Kloza seems like a total expert 
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. If it can really help stabilize prices, then let's see some actual numbers 
! they're gonna keep raising gas prices like there's no tomorrow! my kid's soccer practice just got cancelled b/c mom & dad can't afford the gas 2 get there 
. and what about the poor people who are already struggling? this is just a recipe for disaster 
. I'm definitely driving less now, that's for sure 
!