A production announcement from OPEC left speculators forecasting renewed pain at the pump while President Joe Biden continued to bury American consumers in the green agenda.
The transition to summer blends already met the annual uptick in the price per gallon of fuel, but Monday compounded the problem with an announced production cut. Per their announcement, the Organization of the Petroleum Exporting Countries may reduce production by as much 1.15 million barrels per day, and analysts foresee that sending gas over $4 per gallon.
Speaking with Fox Business, Price Futures Group senior analyst Phil Flynn projected the cuts to have an impact of at least 26 cents noting, “We will see some expanded refinery capacity in a few months, but if I were a motorist I’d prepare for the worst and hope for the best.”
According to AAA, the current national average for regular unleaded gas hovered around $3.50, and while better than last year’s average of $4.19, consumers were feeling the crunch.
AAA spokesperson Andrew Grossman cautioned against heightened concern as he reminded CBS News that the production cuts weren’t finalized.
“This is just an announcement. Will the size of the cut really be a million [barrels per day] plus or will it be something less? That’s entirely possible. They have a month to figure out what they really want to do,” he said.
His assertion was based on a previously announced cut that ended up being double the actual change, a move OPEC assured was “a precautionary measure aimed at supporting the stability of the oil market.”
Meanwhile, the head of petroleum analysis for Gas Buddy, Patrick De Haan reacted by tweeting, “I would largely expect oil prices to rise $3-$6 per barrel as the market prices this in, but again, to the motorist filling up, the initial effect will be limited to a ball park of 5-15c/gal.”
I would largely expect oil prices to rise $3-$6 per barrel as the market prices this in, but again, to the motorist filling up, the initial effect will be limited to a ball park of 5-15c/gal. https://t.co/onbgmPvyua
— Patrick De Haan ⛽️📊 (@GasBuddyGuy) April 2, 2023
However, that wasn’t the only factor that could drive the price per barrel well over the current roughly $85 for Brent crude. As Lipow Oil Associates President Andy Lipow noted to Fox Business, hurricane season is on its way.
“A major storm making landfall along the Gulf Coast, where 15% of the nation’s oil production and over 45% of the nation’s refinery capacity is located,” Lipow said, “can result in a significant supply disruption sending prices even higher.”
Those factors and their impact on the economy, still suffering from the impact of Biden’s inflation-driving policies, seemed of little concern to the White House as they released a joint statement with the European Union to promote the push for green initiatives as a part of the Task Force on Energy Security.”
“Recognizing that clean energy as well as energy efficiency, and demand flexibility measures are essential to enhancing energy security and accelerating the energy transition, the Task Force has exchanged information on policy and market solutions to accelerate the deployment of energy efficiency technology, heat pumps, smart thermostats and related awareness raising activities among consumers and relevant stakeholders,” it read.
“The Task Force also discussed solutions for reducing gas and electricity use and cost through flexible demand response mechanisms that reward customers for reducing or shifting their energy usage,” the statement continued.
Native of Brooklyn, NY, Kevin Haggerty is a graduate of Hunter College where he studied Cultural Anthropology and Geography. An avid reader and truth seeker, he currently resides in Texas with his wife and their dog and, when he isn't researching current events and their impacts, you'll find him spending time with friends and family or working on his next novel.
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