June 5, 2023
Just in time for the summer driving season – you may start to see higher gas prices.
That’s because Saudi Arabia just said it would cut oil production by another 1 million barrels a day starting in July. This is the third significant oil production cut the world has seen since last October.
The announcement by the Saudis came at a meeting of OPEC+ member countries over the weekend. OPEC+ is the group of oil producing countries in the world– the United States is *not* a member. The rest of the OPEC+ countries did not announce any additional cuts to oil production, instead they will keep the reduced level of oil we’ve seen from them for the rest of the year.
Why is Saudi Arabia doing this? Well, frankly because the price for a barrel of oil has been dropping and they want to drive the price up by reducing the world’s supply so they can make more money. They say they’re doing it to create “price stability.”
It’s unclear if that mission will succeed. We haven’t seen a significant increase in gas prices since the last OPEC+ production cut kicked in back in May.
Today — we saw a little bump up in oil prices but they’re still sitting at below $80 a barrel. The national average for a gallon of regular gas in this country is $3.55 that’s down a bunch from a year ago when it was $4.85 for a gallon of regular.
