Montana Gas Prices Will Rise Significantly in the Coming Weeks
Missoula, MT (KGVO-AM News) - With the startling announcement this week that OPEC will cut oil production by two million barrels a day, the price of gas will rise to an undetermined level in the coming weeks and months.
KGVO reached out to Patrick DeHaan, oil analyst for Gas Buddy who delivered the bad news for all Missoula and Montana consumers.
“It's been an aggressive jump in prices and much of that is due to the market learning about the OPEC decision to cut oil production,” said DeHaan. “And so very quickly, the price of oil has escalated significantly and that's driven up gas prices in your neck of the woods and unfortunately, I don't expect it to go a whole lot better anytime soon, really.”
DeHaan said the move by OPEC is already affecting prices around the entire globe.
“With OPEC cutting production, that's going to push up the price of gasoline around the world by the tune of 10 to 30 cents a gallon here in the U.S. and potentially more abroad, as the U.S. Dollar continues to strengthen,” he said. “So certainly, at a time when global inventories of oil remain tight, it's rather surprising that OPEC pushed forward with this production cut, as global inventories have continued to be depleted.”
After President Biden specifically called on OPEC to boost production, DeHaan said it was a slap in the face to the Biden Administration to do the exact opposite.
“Well certainly seems a little bit more political in the timing,” he said. “President Biden had having gone over to Saudi Arabia and the Middle East and called on OPEC to increase production and then for them to do the exact opposite does feel political, but only OPEC would know. “Oil prices going up is good for the oil industry, it likely will mean that they boost production if oil prices remain elevated. Oil stocks would likely do better because oil producers are still producing in the U.S. the same amount of oil they were before, so for U.S. producers, OPEC, which controls a third of the world's oil supply, cutting production is good news to them.”
The big question everyone is asking is will gas prices spike at over five dollars a gallon as they did earlier in the year?
“I certainly don't think we will see any record prices,” he said. “Summer is over and demand is down. While OPEC has cut production, I don't necessarily think that we're going to see anything near record territory like we did earlier this year. Now, having said that, prices have moved up in Montana already. We're back over $4.00 a gallon and the average is $4.03. A week ago, it was $3.94. So prices are up almost 10 cents in the last week, we could see another 10 to 20 cent increase and that's primarily due to the OPEC production cut pushing oil prices up. Closer to home in Missoula, prices range from $4.09 to about $4.19 at most stations, but that could increase here another 10 to 20 cents over the next couple of weeks.”
DeHaan said Costco will always have the lowest prices due to their club membership advantage.