Spike at the station: OPEC's production cut likely to fuel higher gas prices
PITTSBURGH (KDKA) - As expected, OPEC+ pulled the trigger on its threatened oil production cut, and already we're already seeing a price hike at the pump.
Well...that was fast.
So, what is our gas future looking like? As usual, I reached out to GasBuddy.com's Patrick De Haan for the forecast.
The expectation of a production cut was enough to get prices climbing and now the reality of OPEC+ officially cutting production by two million barrels will pump them higher.
Today's prices are based on an expectation of cuts, which according to De Haan "has been expected for probably four to five days and as a result, the oil prices have gone up already on the likelihood this was going to happen."
Even though production hasn't been cut just yet, De Haan tells us that oil prices are already up $10/barrel from where they were about last week and that's already pushing prices up.
Before the production cut, Pittsburgh gas prices were already up 3 cents per gallon on Wednesday.
"We can see another probably seven to 20 cents a gallon," De Haan said when it comes to price increases.
He said that locally, we're almost certain to see the prices go up over $4/gallon very quickly.
De Haan said even at the discount locations such as Sam's, Costco, and BJ's, expect a climb before the weekend.
"OPEC just wants to send oil prices up because that's what OPEC exists for," De Haan said.
According to De Haan, OPEC wants to get all they can out of us as consumers, while at the same time keeping us from searching for alternatives to gasoline.
So, cut the production, and the price goes up.
"If you need a few gallons, you'll save a little bit of money by filling up sooner rather than later," De Haan said.
In reality, some of the OPEC countries haven't been producing their full allotment anyway, so the real cut won't be two million barrels a day, according to De Haan.
"We could probably see outputs cut, realistically, of between 500,000 to a million barrels per day," he explained.
That's still enough to push up the cost of oil prices as well as gas prices with it. De Haan telling us that the impact is already being felt right here with prices rising about three cents since midnight.
That was just when I spoke with him late on Wednesday - the climb is not over.
"I would expect some sort of 7-15 cent impact, maybe 20 cents, from the OPEC decision," he said. "We're definitely going over $4/ gallon. I think I think that's in short order. So you know a lot of those low prices and [I'm] seeing some prices in Pittsburgh still, Sam's, Costco [are] at $3.55 $3.49 even $3.44. You're probably going to see those going up pretty quickly here this weekend."
De Haan again said if you have a half a tank or less - fill up now if you want to save some money.