Gasoline Prices May Hit Highest Levels Since 2014 As OPEC + Maintains Oil Production Cuts: Report

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Gasoline prices at the pump may exceed $ 3 a gallon by Memorial Day, following a decision by the Organization of the Petroleum Exporting Countries and its allies to maintain production restrictions until April, according to a report. from GasBuddy on Thursday. The national average for regular unleaded gasoline has not exceeded the $ 3 threshold since Oct. 10, 2014, more than 2,300 days ago, the travel and navigation app GasBuddy said.

On Thursday, the group of oil producers, known as OPEC +, agreed to extend current production cuts until April, although it allowed a waiver for Russia and Kazakhstan, which may moderately increase production due to “seasonal consumption patterns.” Meanwhile, Saudi Arabia said it would also continue to voluntarily cut 1 million barrels per day from its own production until the end of April. Read: OPEC + extends production cuts into April, in surprise move The news sent oil prices higher on Thursday, and US benchmark crude prices settled at their highest level since April 2019. The April West Texas CL.1 crude contract, + 4.47% CLJ21, +4.47% ended Thursday at $ 63.83 a barrel, an increase of $ 2.55 or 4.2%. The outcome of the OPEC meeting “lends itself to a bull run in oil markets, as global oil demand recovers amid the recovery from the COVID-19 pandemic while OPEC, which controls a third of world production resists recovery and maintains extreme production. ” cuts, ”Patrick De Haan, GasBuddy’s chief oil analyst, said in a statement. “The extension of production cuts maintains a growing imbalance between supply and demand, and puts more pressure on oil prices to rise if global demand continues to recover, he said. “A continued recovery seems likely, led by American motorists filling their tanks at the fastest pace since the pandemic began.” De Haan predicts that the national average price of gasoline now has a 70% chance of reaching $ 3 a gallon, “mainly due to OPEC opposition to increasing oil production.” The GasBuddy report noted that the oil producers group’s decision comes at a time when Americans are increasing their appetite for fuels, with data from “Pay with GasBuddy,” a gasoline-saving program, showing that the Gasoline demand last week reached the highest in almost a year, 15% more than the previous week and “now only one digit” of gasoline demand before the pandemic. The average price per gallon for regular unleaded beverages stood at $ 2,744 late Thursday afternoon, up more than 33 cents a gallon from a year earlier, according to GasBuddy.