OPEC+ output boost could have a positive impact at the gas pump
of ConsumerAffairs-
OPEC+ will increase oil production by 547,000 barrels per day starting in September, ending 2023-era cuts and pushing crude prices lower, which may help ease U.S. gasoline prices.
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GasBuddy reports the national average gas price has risen slightly to $3.11 per gallon, though prices remain 32.8 cents lower than a year ago; analysts expect potential declines ahead due to supply increases and economic headwinds.
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U.S. oil inventories are up and refinery activity remains strong, while weak employment data and geopolitical uncertainty may temper oil market volatility and influence future gas prices.
In a move that could reshape the global oil landscape and bring modest relief to U.S. drivers, OPEC+ has announced a significant increase in oil production set to begin in September. The decision is expected to influence gasoline prices in the United States, where prices at the pump have been on a slow upward climb over the past two weeks.
The 23-member alliance of oil-producing nations, including Saudi Arabia and Russia, has agreed to restore production levels to pre-2023 levels, ending cuts that were put in place to stabilize falling prices. Beginning in September, OPEC+ will boost crude oil output by 547,000 barrels per day, rolling back a portion of the 2.2 million bpd cuts introduced last year.
The announcement quickly sent shockwaves through oil markets. U.S. benchmark West Texas Intermediate (WTI) crude dropped to $65.72 per barrel, down from $66.46 a week ago, while Brent crude fell to $68.22 per barrel. These price drops mark a shift in sentiment following initial gains earlier in the week on fears of U.S. sanctions and tariffs affecting Russian oil.
Impacts on U.S. gasoline prices
The decision to increase supply arrives at a pivotal moment for U.S. motorists. According to GasBuddy, the national average price for gasoline has risen 1.2 cents over the past week to $3.11 per gallon. While up slightly from a month ago, prices are still 32.8 cents per gallon lower than this time last year.
Despite regional fluctuations such as an 18.9-cent surge in Indiana and a 12.7-cent drop in Florida most states have experienced only modest changes. Patrick De Haan, head of petroleum analysis at GasBuddy, noted that with OPEC+ now fully restoring production to 2023 levels oil prices may continue to face headwinds, potentially paving the way for a decline in gas prices in the weeks ahead.
Writing in the companys weekly blog, DeHaan said price cycling led gas prices in some states to see double-digit increases or decreases, but most saw only modest fluctuations.
Uncertainty complicates forecasts
While increased oil supply would typically push fuel prices lower, broader economic conditions could influence how the trend plays out. A weak U.S. jobs report and looming geopolitical uncertainties including renewed tariff threats have produced some uncertainty in the markets.
Commodities analysts say the oil market remains volatile. U.S. Energy Information Agency data further support the possibility of softer prices ahead.
U.S. oil inventories rose by 7.7 million barrels last week, and although gasoline inventories fell by 2.7 million barrels, they remain near seasonal norms. Refinery utilization is still high at 95.4%, with implied gasoline demand climbing to 9.15 million barrels per day suggesting strong but manageable consumption.
Posted: 2025-08-04 14:25:47
