Recent production cuts by OPEC are predicted to raise gas prices by 15 to 30 cents, according to energy analyst Patrick De Haan.
De Haan’s prediction, if accurate, will leave gas prices at an estimated $3.95 to $4.10 per gallon, according to U.S. gas averages recorded by AAA. While current gas prices are not directly tied to oil supply on a day-to-day basis, the dwindling gas supply in America will eventually feel a ripple effect as the oil supply continues to be reduced. (RELATED: The White House Is Already Trying To Take Credit For Falling Gas Prices. Here’s Why That’s Malarkey)
De Haan is the leading petroleum analyst for GasBuddy, and the “foremost expert on issues driving gasoline prices,” according to his website. He has worked in energy analysis for 17 years and is regularly referenced during gas price changes and fuel disruptions.
OPEC announced Wednesday that oil production will drop by 2 million barrels per day in response to uncertainty in the global economy, which represents about 2% of global demand, CNN reported. Similarly, gasoline prices, per million barrels, have consistently dropped since January when supply was over 250 million, according to the U.S Energy and Information Administration (EIA).
OPEC’s decision to reduce oil production adds insult to injury as the gas supply has consistently decreased into October leaving supply under 220 million barrels, EIA reported. President Joe Biden attempted to work with OPEC over its shortsighted decision Wednesday, according to CNBC, yet the organization continued to announce the “unnecessary” cut, Biden said.
As a result of OPEC’s production cut, I estimate U.S. #gasprices will be impacted by roughly 15-30c/galv
— Patrick De Haan ⛽️📊 (@GasBuddyGuy) October 5, 2022
Markets outside the fuel industry are expected to feel the effects of reduced supply as winter approaches, according to the Federal Reserve Bank of San Francisco. Transportation, manufacturing and heating are expected to see large price increases over the next few months.
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