Gas prices could hit $4 a gallon after OPEC production cut
Los Angeles, CaliforniaSept. 26, 2022 Gas prices are going up in Southern California on Sept. 26, 2022. A man fills his truck in Torrance, CA. He said he normally pays $70 to fill up, but today its $130 on Sept. 26, 2022. (Carolyn Cole / Los Angeles
A surprise production cut by OPEC members is expected to pump up gasoline prices just ahead of the busy summer driving season.
Phil Flynn, a senior analyst at Price Futures Group and FOX Business contributor, said the cuts of up to 1.15 million barrels per day could cause gas prices to rise by at least 26 cents.
As of Monday, regular gasoline averaged roughly $3.50, according to AAA. If Flynn's prediction holds, it could mean gasoline prices will climb above $4 per gallon as summer nears.
U.S. oil prices soared above $80 per barrel on the developments.
Minus the move from OPEC, Flynn noted that prices will increase between 10 and 15 cents anyway when refineries change the gasoline blend during the summer driving season.
"We will see some expanded refinery capacity in a few months, but if I were a motorist I'd prepare for the worst and hope for the best," Flynn told FOX Business.
This comes at a time when consumers are being hammered by high inflation, which rose 6% year over year in February.
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Further complicating matters, though, is hurricane season – less than 60 days away – which could disrupt oil production, and drive up the price of gas even more, according to Lipow Oil Associates President Andy Lipow.
"A major storm making landfall along the Gulf Coast, where 15% of the nation’s oil production and over 45% of the nation’s refinery capacity is located, can result in a significant supply disruption sending prices even higher," Lipow previously told FOX Business.
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Oil production rose to nearly 12.5 million barrels per day in January, which is the highest level since March 2020, according to data from the Energy Information Administration.
Read more of this story from FOX Business.