An Upcoming Decision Could Make Gas Prices Go Much Higher

OPEC is set to decide about removing a million barrels of oil from the supply which would make gas prices more expensive.

By Joseph Farago | Updated

As if gas prices couldn’t get any more inflated, analysts believe that a new motion could continue their rapid increase. Organization of the Petroleum Exporting Countries, or OPEC, is a group of various countries invested in oil, which is planning to meet in Vienna, Austria, this Wednesday to discuss the new policy. An impending output cut could affect millions of oil barrels daily, accelerating the fuel price.

Dan Pickering, CIO of Pickering Energy Partners, stated that this meeting is highly unprecedented and the first in-person meeting for OPEC since 2020. All 13 countries coming together means a historic outcome could ensure, with many analysts believing that a significant cut will be introduced. Pickering believes that removing one million barrels is unlikely, and a more reasonable number of 500,000 is expected.

According to CNBC, this upcoming OPEC meeting is already influencing gas prices worldwide. The cost of oil went up Monday morning, rising by 4%. Brent crude, a combination of oil from the North Sea, hit an international high, with barrels escalating to $88.54 each.

Though oil and fossil fuel corporations are in a precarious position, some experts believe that the market is looking up for the industry. Stephen Brennock, an analyst at PVM Oil Associates in London, believes there will be some benefits to the upcoming meeting, especially after significant September losses. A new increase in trading activity could push oil barrels back up to $100 each, similar to what they were trading at the beginning of the Russian invasion of Ukraine.

Though the oil industry wants to see a return to heightened barrel prices, people worldwide are suffering from elevated costs for their necessities. Gas prices have finally been settling after months of soaring, with oil barrel costs dropping by four dollars in September, which was their lowest worth since the war against Ukraine began. Many believe this upcoming OPEC meeting cut will send oil barrel prices back to their mid-summer heights.

Though residents worldwide are waiting with bated breath about the OPEC meeting’s outcome, the policy changes might not be enough to send oil barrel prices back to triple digits. Ole Hansen of Saxo Bank stated that the multinational group isn’t as powerful as it used to be. The organization has struggled extensively with meeting the “quota levels” they attempted to adhere to.

Alongside the OPEC in-person assembly, other factors on the oil market could increase gas prices this month. A couple of weeks ago, the U.S. Energy Department revealed that they would be using ten million barrels from the Strategic Petroleum Preserve’s stockpile, which is amove the U.S. performs in turbulent fuel situations. As America pauses its trades and deliveries for oil over the upcoming months, overall demand could push gas prices up again.

Sanctions from the E.U. against Russia could also massively impact fuel costs and general barrel prices amidst unparalleled demand. The seaborne sanctions will likely kick in during early December or January, which could continue financially crunching European citizens already dealing with heightened energy expenses and inflated gas costs.