OPEC Announcement Pushing Fuel Prices Higher

Fuel prices continue to move higher after OPEC nations announced last week that production would be cut by two million barrels per day starting next month.  Economic experts say this will send fuel prices soaring, and could put the global economy in a tailspin.  OPEC officials said the trim is necessary because the oil market is unstable, but White House officials say OPEC is intentionally manipulating the market, and siding with Russia.  

Brian Deese, Director of the National Economic Council, said oil companies have a role to play, by lowering the cost of refined gas that they send to your local gas station.

“The wholesale price, the price that the gas station companies are paying for that gas, not withstanding, the fact that the oil prices have come up a bit, is still historically low, compared to the retail price that they are charging at the pump.” 

West Texas Crude was trading just above $90 per barrel in Monday’s action.  Deese, added officials are trying to weigh how they can increase supply, without depleting the Strategic Petroleum Reserve.

"We are laser-focused on what we can do to keep bringing that price down. But we start from the prospect of American consumers are paying significantly less for gas at the pump today than they were a month ago, two months ago. And that reflects some of the progress that we have made."

In addition to reportedly eyeing another release from the Strategic Petroleum Reserve, the Administration is looking at a measure that could prop up domestic production and circulation, by placing restrictions on oil exports.  There is also a measure in the Senate, that would allow the U.S. to sue OPEC under antitrust laws.

Experts says Russia, who is a part of OPEC+, could benefit from the production cuts, since the surge in prices could help to fund the war in Ukraine.

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