Gas prices are rising once again after dropping from July to mid-September, most recently encouraged by the OPEC+ coalition of oil-exporting countries’ resolve to reduce crude output.
In a bid to support falling oil prices, the Saudi-led cartel on Wednesday decided to cut production by 2 million barrels per day, marking its first significant decrease in more than two years. The choice runs counter to efforts by the United States and Europe to limit the money that Russia makes from the sale of its petroleum.
About 2% of the world’s oil output is represented by the two million barrels per day reduction.
As the price of Brent oil, the global benchmark, increased more than 1.5% after the meeting, adding to increases observed in previous days, it seemed that the decision had the desired effect for OPEC.
Following oil, gasoline prices also increased, with the national average price of a gallon of regular reaching $3.86 on Thursday, according to AAA.
According to the travel club, it is up 7 cents from Monday but down from a June high of $5.02 In a press release on Thursday, AAA said that “high gasoline demand, amid constrained supply, has contributed to increased pump prices countrywide.”
It added, using fresh data from the Energy Information Administration, that the demand for gas grew countrywide to 9.47 million barrels per day last week, up from 8.83 million the week before.
According to AAA, the West Coast’s supply has been significantly constrained by ongoing maintenance at around six refineries, raising pump prices. However, respite is expected in the next several days. The Midwest’s supply has become more scarce as a result of a catastrophic refinery fire in Toledo, Ohio, according to the group.
Gavin Newsom, the governor of California, tweeted on Thursday that “gas prices are too high” while promoting the 23 million Californians who would get tax refund cheques in the mail this week.
Patrick De Haan, analyst at GasBuddy, tweeted on Thursday that many petrol stations now recording prices below three dollars per gallon would “disappear in the weeks ahead, mostly owing to OPEC’s decision to decrease oil supply.”
Before prices recently started to rise, American drivers were paying less at the pump. If prices rise more before the November 8 midterm elections, the White House may be considering its options.
Commodity analysts at J.P. Morgan Securities Natasha Kaneva and Prateek Kedia said in their research that “[A] policy reaction by the Biden administration is undoubtedly soon.”
According to the experts, the response would probably mean quickening the nation’s emergency petroleum supply, the Strategic Petroleum Reserve, supplies. Prior to the November 8 midterm elections, a surge in petrol costs might cause the White House to consider more actions, they suggested.