The Organization of the Petroleum Exporting Countries announced it will soon cut production of oil by two million barrels a day. That’s expected to drive up gas prices around the nation.
It was announced that some of the world’s largest oil suppliers plan to cut oil production by up to two million barrels per day. In a statement, the Organization of the Petroleum Exporting Countries (OPEC) said this is due to the “uncertainty that surrounds the global economy and oil market outlooks."
Some motorists are already seeing the effects of this news at the pump. According to AAA, the average price per gallon of regular grade gasoline Thursday is nearly $3.33 - four cents higher than the day before.
It's only a slight difference, but people are worried.
“This is a mess. A total mess,” said Jerome Almanzar, who was just learning that indications are that gas prices could once again be on the rise.
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“That’s not good news because I commute from Fairfield. That’s 54 miles. So, it’s costing me at least $110 a week,” he said.
The news of possible oil production cuts is already affecting prices. At one Meriden gas station, prices were $3.09 a gallon Wednesday but were 20 cents higher on Thursday.
“Right now, the station I am at is $3.29 and it’s probably going to be going up with our next delivery coming in,” said Kevin Curry, owner of Teddy’s Stores.
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Curry said from Monday to Tuesday, his cost per gallon rose by 35 cents. He said his next load of fuel could cost as much as $3,000 more. He explains there is volatility that makes things unpredictable.
“It could drop 20 cents tonight. I mean, we just don’t know that. It’s a commodity that’s traded on Wall Street and we have no say in it,” Curry said.
The Connecticut Energy Marketer’s Association president said the wholesale price increase is a Wall Street reaction to the OPEC announcement in anticipation of a tighter supply, and that’s hard to accept.
“Theoretically, if OPEC’s announcement actually meant that there was less gasoline in New Haven Harbor, then I would agree that prices should go up because that would mean that we have less supply,” said Herb, explaining this is not the current case and that traders are merely anticipating a tighter supply.
For now, the average price in Connecticut is $3.33 per gallon - a far cry from the year’s highest average of $4.98 cents per gallon. That was back in June.
Now the concern is whether or not prices could be headed in that direction again.
