Thursday, January 26, 2023

AAA: Will OPEC’s Oil Production Cut Affect the Decline in Gas Prices?

Gas pump with hand removing nozzle (WYDaily photo/Adobe)
(WYDaily photo/Adobe)

VIRGINIA BEACH — A meeting Sunday of OPEC+, a group of 23 oil-producing nations, may influence the recent decline in gas prices, according to AAA Tidewater.

“Gas prices are dropping sharply and are one penny lower than a year ago in Hampton Roads,” said Ryan Adcock, AAA Tidewater public relations specialist. “But with oil being the main ingredient in gasoline, OPEC+’s move could slow this decline. However, the gas price will likely continue to be lower than it was a year ago.”

Domestic gasoline prices have dropped 26 cents nationally in the past two weeks. But OPEC+ — a group that includes Saudi Arabia and Russia — decided to maintain output cuts of 2 million barrels per day, which is about 2% of world demand to boost the global price of oil.

According to AAA, the global price of oil has fallen recently on fears of demand weakness, specifically in China. Regardless, the national average pump price for a gallon of gas dropped 14 cents in the past week to $3.40.

According to data from the Energy Information Administration (EIA), gas demand held steady at 3.2 million barrels per day, while total domestic gasoline stocks rose by nearly 2.8 million barrels to 213.8 million. That increase in supply and steady gasoline demand has contributed to pushing pump prices lower.

Today’s national average of $3.40 is 39 cents less than a month ago and 5 cents more than a year ago.

(AAA Tidewater)

Locally, the gas price average for the Commonwealth decreased to $3.26, nine cents lower than a week ago and 23 cents lower than a month ago. In Hampton Roads, prices decreased 11 cents to $3.16, 31 cents lower than last month and one cent lower than a year ago.

Related Articles

MORE FROM AUTHOR