October 5, 2022
Gas prices will likely go up after OPEC+ decided this morning to cut oil production by not 1 but two million barrels of oil a day starting in November.
That is the largest cut to oil production since the pandemic and amounts to about 2% of the world’s daily oil production.
As I told you in this video yesterday when I warned you this move was coming, when oil production is cut, that lessens the supply of oil on the global market. When there’s less oil on the market, they refine less gasoline which means prices go up for you.
The cost for a barrel of oil had been going down a lot in the last few months and OPEC+ doesn’t like that because that means less profit for them. OPEC+ is a group of oil producing countries that control more than 40% of global oil production. In their announcement today they said the production cut is happening “in light of the uncertainty in the global economy and oil market outlook.”
Even though these production cuts haven’t even started yet, the price for a barrel of oil jumped back up globally over $90 a barrel and it also went up in the United States.
Read the announcement from OPEC+ here.
