OPEC+ reportedly plans to increase production in February, but drivers still won’t see much relief
The OPEC+ alliance is reportedly expected to approve an increase in production of 400,000 barrels of oil per day for the month of February, but unfortunately, that doesn’t mean drivers will see immediate relief at the pump, according to an industry expert.
The move comes after officials from OPEC countries, led by Saudi Arabia, and their allies, including Russia, had already approved an increase in production of 400,000 barrels per day for the month of January amid growing fears over the omicron variant’s impact on the global economic recovery.
GasBuddy’s head of petroleum analysis, Patrick De Haan, told FOX Business that the expected increase in February won’t likely be enough to drop prices at the pump as long as demand remains ahead of supply.
De Haan predicted that January and February gas prices “shouldn’t rise too much.” However, by March, drivers could start to see a rise of 25 to 75 cents a gallon lasting through May.
GasBuddy projected that the national average may even swell to upwards of $4 per gallon this spring “largely due to pandemic recovery and rising demand before relief, or additional oil supply, arrives later in 2022.”
According to GasBuddy, most major cities could see prices around or just under of $4 per gallon. However, cities in California such as San Francisco and Sacramento could even see average prices higher than $5 per gallon.
De Haan noted that “all signs point to gas prices remaining elevated next year until the high prices attract additional oil supply, which will help prices cool off as we end 2022.”
However, this isn’t necessarily a bad thing, he said.
“While Americans are likely to see higher prices in 2022, it’s a sign that the economy continues to recover from Covid-19. The higher prices go, the stronger the economy is. No one would love to see $4 per gallon gasoline, but we’ll only get there on the back of a very strong economy, so it’s not necessarily bad news,” said De Haan.