BOISE, Idaho — Idahoans are in for a crude awakening, as crude oil production giant OPEC made a surprise announcement over the weekend of massive cuts beginning in May.
The Organization of the Petroleum Exporting Countries (OPEC) is the leading producer of crude oil, controlling production, supply and pricing in the global petroleum market. Therefore, it can be expected that the cuts in production will result in an observable surge in the cost of gasoline.
OPEC said they intend to cut a combined 1.16 million barrels a day starting in May and lasting through the end of the year. This cut is on top of an already 2 million-barrels-per-day cut announced in October of 2022.
IDAHO IMPACT:
Despite the inevitable jump at the pump, petrolfied consumers can temporarily rejoice.
The good news? The average cost of unleaded gasoline in the Gem State is $3.55, which is about four cents less than a week ago and 11 cents less than a month ago.
The bad news? AAA Idaho reminds consumers to not get too excited, as a spike in price is imminent.
According to AAA, the national average currently sits at $3.51 per gallon, which is seven cents more than a week ago and 12 cents more than a month ago.
With the Idaho and national averages now less than a nickel apart, the Gem State currently ranks 13th in the country for most expensive fuel, down from 11th place last week.
Idaho gas prices as of Monday:
- Boise - $3.70
- Coeur d'Alene - $3.32
- Franklin - $3.75
- Idaho Falls - $3.54
- Lewiston - $3.28
- Pocatello - $3.46
- Rexburg - $3.36
- Twin Falls - $3.64
NATIONAL NUMBERS:
For comparison, the title for most expensive state average belongs to California ($4.83), followed by Hawaii ($4.79) and then Washington ($4.30). The cheapest fuel in the U.S. can be purchased in Mississippi at $3.02 per gallon.
AAA Idaho Public Affairs Director Matthew Conde said, "the spring and summer months typically bring increased fuel demand, and prices tend to rise. But no one was expecting OPEC to cut crude supplies, and with both conditions hitting around the same time, it could be a real one-two punch for drivers."
The organization's announcement stoked fears of inflation as markets opened Monday morning; sending shockwaves through the crude market and igniting concerns on just how soon consumers may see the price of gasoline go up.
"If the market has serious concerns about the possibility of a global recession, that may cushion the blow. But if not, we could be in for a pricey start to the busy driving season," said Conde.
OPEC OIL OUTLOOK:
After dipping as low as $67 per barrel in mid-March, the West Texas Intermediate benchmark for crude oil is currently trading over the $80 mark in the aftermath of OPEC's announcement. AAA predicts an initial 8-cent to 12-cent increase in gas prices solely based on the announcement itself.
According to the Energy Information Administration refinery production in the Rockies region currently sits at 82% of total capacity, up from 80% the previous week. Gasoline demand increased by 200,000 barrels per day to 9.15 million barrels, while gasoline and crude oil inventories fell by 3 million and 7.5 million barrels, respectively. If higher demand or tighter supplies remain in place this week, both crude oil and gas prices could rise.
"To stretch the time between fill-ups, consider bundling your trips or running errands with a friend or loved one to use one vehicle instead of two," Conde said. "Building good habits around fuel consumption will keep some money in your pocket and do the planet a favor at the same time."
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