In a surprise move, a group of oil-rich nations led by Saudi Arabia recently announced they would cut production by 1.16 million barrels per day, leading to an immediate jump in oil prices as global markets braced for shorter supply.
As people fill up their tanks for road trips in the warmer months, they may find gas prices ticking upward again.
Patrick De Haan, head of petroleum analysis at GasBuddy, made a similar prediction on Twitter following the news. “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 ballpark of 5-15c/gal,” he said.
The price jumps could come just as the busy driving season hits and at a time when many people are already feeling the financial effects of dealing with high inflation over the past year. Growing energy prices could also help sustain inflation on a range of goods and services, adding pressure to the Federal Reserve as it continues to try to rein in prices.
“Gasoline and diesel prices are expected to rise 12 to 15 cents per gallon,” Andy Lipow of Lipow Oil Associates told Yahoo. “I expect prices to rise to my previous Feb. 20 price forecast of $3.65 as we head into the summer driving season. I don’t expect a repeat of last summer’s price surge to $5 per gallon.”
“This domestic interest takes precedence in Saudi decision-making over relationships with international partners and is likely to remain a point of friction in U.S.-Saudi relations for the foreseeable future, even without taking into account the Russian dimension,” Ulrichsen said.
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