Gas prices: Prepare for a 'bump at the pump,' says analyst
In a surprise move, OPEC+ producers decided they would cut oil production by 1.2 million barrels per day. Crude oil prices surged after the announcement, hitting its biggest daily rise in nearly a year. As the market continues to price in OPEC's move, consumers are left wondering what it could mean for U.S. gas prices. Matt Smith, Kpler Lead Oil Analyst, predicts it will cause a "bump at the pump."
Smith points out the typical trend of rising gas prices ahead of the summer season, but says this announcement will "provide a bit of support for Crude prices." The current national average gas price is $3.50 per gallon, according to AAA. "That could continue to tick higher in the next month or two," says Smith. He predicted that we could be headed toward $4 a gallon levels.
Overall, gas prices have been trending lower since hitting a record last summer. The highest recorded average price for Regular Unleaded was $5.01 per gallon in June of last year.
You can watch Rachelle Akuffo's entire interview with Matt Smith here.
Key Video Moments
00:00:15: Seasonal trend of gas prices
00:00:31: What this means for crude prices
00:00:39: A 'bump at the pump'
Video Transcript
RACHEL AKUFFO: Obviously consumers probably seeing these headlines crossing and wondering, what does this mean for prices? March and April, as you mentioned, that's when refineries are cranking up some of their summer blend gasoline. What are the expectations for how this filters down at the pump?
MATT SMITH: Well, you typically have a seasonal trend of gasoline prices rising ahead of summer driving season there, so through March, April, May time. And so that would be happening even if all prices were remaining flat. And so with this announcement, this is going to provide a bit of support for crude prices. And as we know, with prices at the pump, they shoot up like a rocket but float lower like a feather. And so this is going to provide a bump at the pump essentially.
We're $3.50 on the national average now. So we should expect it to continue ticking higher here in the next month or two, perhaps heading towards that $4 a gallon level there. So in summary, higher prices basically.
