Gas Prices Could Hit $3 In Near Future
The limited supply is due to OPEC and Russia cutting oil production last year when demand was very low. OPEC+ is scheduled to meet Thursday to determine if more oil production is warranted and needed. The appeal of pricing for increased production has been on the rise.
US crude has recovered to around $60 a barrel after going negative last April. This rise in oil prices has also lifted prices at gas stations around the nation. According to AAA, the national average hit $2.70 a gallon on Friday. In April, the national average was $1.76 a gallon.
Investors believe an economic rebound is imminent as the vaccine campaign continues. This would result in a massive wave of consumer spending on road trips, cruises, flights and other situations that involve oil.
If OPEC+ determines the market has recovered enough to justify a decrease in production cuts, we could see a slight decrease in gas prices. "Given the allure of higher prices, there should be more supply coming onto the market," said Ryan Fitzmaurice, energy strategist at Rabobank.
"Given where prices are, how will anyone tell Russia that they need to curtail production?" said Jim Mitchell, head of Americas oil analysts at Refinitiv.