Oil production cut expected to spike gas prices

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(NewsNation) — Gas prices are already rising slightly after weeks of decline, and drivers are now bracing for more sticker shock.

Global oil supply is set to tighten, intensifying concerns over soaring inflation after the OPEC+ group of nations announced its largest supply cut since 2020 ahead of European Union embargoes on Russian energy.

The move has widened a diplomatic rift between the Saudi-backed bloc and Western nations, which worry higher energy prices will hurt the fragile global economy and hinder efforts to deprive Moscow of oil revenue following Russia’s invasion of Ukraine.

This is likely to drive prices higher, particularly for Middle East oil, which meets about two-third of Asia’s demand, industry participants said, further adding to inflation concerns as governments from Japan to India fight rising costs of living, while Europe is expected to burn more oil to replace Russian gas this winter.

The average price per gallon is $3.87 — up from $3.72 one week ago, according to GasBuddy.

Gas prices dropped for 98 straight days over the summer. In June, the average price across the country was more than $5 per gallon.

For a while, oil prices dropped relatively low — going below $80 a barrel for the first time since January.

Reuters contributed to this report.

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