Fuel prices at the pump could climb above $ 3 per gallon on Memorial Day, following a decision by the Organization of the Petroleum Exporting Countries and their allies to keep production fuel in place until April, according to a report by GasBuddy Thursday.
The national average for regular unleaded petrol has not reached the $ 3 threshold since October 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 the current production cut until April, although they granted an exemption for Russia and Kazakhstan, which will be allowed to increase production modestly due to ‘seasonal consumption patterns’. Meanwhile, Saudi Arabia said it would also continue to voluntarily cut 1 million barrels a day from its own production until the end of April.
Read: OPEC + extends production cut to April as a surprise
The news sent that oil prices rose on Thursday, with US standard crude prices being the highest since April 2019. The April West Texas crude contract CL.1,
CLJ21,
ended Thursday at $ 63.83 per barrel, up $ 2.55 or 4.2%.
The outcome of the OPEC meeting ‘leads to a control of the bulls in the oil markets, as global oil demand bounces amid the recovery in the COVID-19 pandemic, while OPEC, which accounts for a third of world production control, increasing recovery and maintaining extreme production cuts, ”said Patrick De Haan, head of petroleum analysis at GasBuddy, in a statement.
“Expanding production cuts means a growing imbalance between supply and demand, putting more pressure on oil prices to rise if world demand continues to recover,” he said. motorists filling their tanks at the fastest pace since the pandemic began. “
De Haan predicts that the national average petrol price now has a 70% chance of reaching $ 3 per liter, “mainly due to OPEC’s opposition to increasing oil production.”
The GasBuddy report pointed out that the decision by the oil producer group comes at a time when Americans are increasing their appetite for fuel, with data from ‘Pay with GasBuddy’, a petrol saving program, showing that petrol demand last week was the highest in almost a year. , 15% higher than last week and ‘now just a few figures’ away from pre-pandemic demand for petrol.
The average price per liter of lead-free people stood at $ 2,744 late on Thursday afternoon, with a price of more than 33 cents per liter from a year ago, according to GasBuddy.