INDIANA –OPEC has decided to stick with its current plan of cautious monthly increases in oil production, even though industry experts hoped for more with gas prices and inflation on the rise lately.
The OPEC Plus alliance, comprising members of the Organization of the Petroleum Exporting Countries led by Saudi Arabia and nonmembers led by Russia, approved an increase in production of 400,000 barrels per day for the month of December at a meeting conducted online Thursday. Their plan is to add that amount of oil to the market every month into next year.
President Biden has called on OPEC repeatedly to pump more oil. Saudi Energy Minister Prince Abdulaziz bin Salman said member countries were “underscoring their commitment to market stability.”
While that is concerning for the long-term, GasBuddy’s Head of Petroleum Analysis Patrick DeHaan said in the short-term, the jump in gas prices is “finally running out of steam as oil prices have stabilized.” At one point this week, oil prices were around $85 per barrel before they went back down. DeHaan says it will be important to keep an eye on oil prices.
“Don’t be in any rush to fill up for the next five to seven days and probably beyond that. Prices that did just go up will start coming back down,” said DeHaan.
He says some stations could go down 10 to 20 cents in the next week.
“And it’s not impossible, as these stations pass along these lower prices, that you could some stations get back under the $3 per gallon mark. That is going to precipitate the next price cycle,” said DeHaan.
Price cycling is when stations choose to undercut each other with lower prices almost every day until they run out of profit margin. Once that margin is gone, prices go back up.
DeHaan says gas prices are higher the further north you go in Indiana.
“If you’re heading into Hammond, Gary, or towards Chicago, prices tend to be a little bit higher. Fort Wayne and South Bend tend to be a little bit higher as well,” said DeHaan.