OPEC Increases Production as Oil Prices Begin to Impact Summer Travel Plans
Gas consumption in the U.S. is quickly rising as the summer driving season and airport travel numbers increase to their highest since the beginning of the pandemic in March 2020, according to OilPrice.com, a source for oil and energy news.
Data from GasBuddy shows that U.S. gasoline demand increased by 6.8% on Sunday compared to the previous Sunday — 9.6% above the average for the past four Sundays, reports OilPrice.com. Patrick De Haan, head of petroleum analysis for GasBuddy, stated that this was the highest Sunday demand since the summer of 2019.
OPEC+, an intergovernmental organization that helps to ensure the stabilization of oil markets, agreed Tuesday to increase their output of oil of about 450,000 barrels a day, starting next month, according to The Wall Street Journal. Meanwhile, Saudi Arabia agreed to continue easing separate, unilateral cuts of one million barrels a day.
The global economy is forecast to be one of the fastest expansions in several decades as demand continues to surge, reported the WSJ. Recovery in oil demand and oil prices have been big contributors to rising inflation.
CNN noted that data from GasBuddy also shows that gasoline is at its most expensive since 2014 and AAA puts the national average at $3.05 per gallon, up from $2.90 one month ago and $1.98 from the previous year. While demand is certainly high as we head into summer and restrictions are lifted, the Colonial Pipeline hack has also helped push gas prices up.
Brent crude futures rose above $70 per barrel on Tuesday, while West Texas Intermediate futures, the U.S. benchmark, jumped above $68 a barrel, their highest level since late 2018, reported CNN.
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