Price at the Pump: OPEC To Produce More Oil, Prices Drop

After weeks of speculation, OPEC made it official this weekend, announcing they will restore oil production at a faster clip than expected.  Patrick DeHaan with Gasbuddy.com said the increased production will start in June.

“Raising production by over 400,000 barrels a day," DeHaan noted.  "OPEC has really been making a lot of surprising announcements as of late, but certainly has some challenges.  Kazakhstan has been noticeably talking about potentially increasing oil production, and so OPEC likely having to act here now to stem some of that frustration amongst Kazakhstan.  And with the increase in oil production markets selling off over the course of the weekend.”

Following OPEC’s announcement, both West Texas and Brent Crude were trading around the $60 per barrel mark in early Tuesday action.  DeHaan added while it remains to be seen how far down oil prices will drop, this decrease will certainly help U.S. motorists with lower fuel prices in the weeks ahead.  However, at this point, those lower prices haven’t been realized.

“Much of that is due to refinery maintenance and turnarounds that are ongoing," DeHaan said.  "But in the weeks ahead as that maintenance and turn around work finishes. I do expect that you will start to see lower gasoline, diesel and jet fuel prices across the US and that's something that could ultimately bring the national average to fall below $3 a gallon here in time for the summer driving season.”

DeHaan added with little movement in tariffs, the Ukraine/Russia war as well as U.S./Iran nuclear talks, OPEC is expected to continue to control the direction and movement of oil prices for the foreseeable future.

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