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Time to gas up, Tampa Bay: Prices at the pump could jump 10 to 15 cents soon after OPEC agreement

Gas prices could jump 10 to 15 cents within weeks thanks to OPEC's oil production cut.  [Getty Images]
Gas prices could jump 10 to 15 cents within weeks thanks to OPEC's oil production cut. [Getty Images]
Published Dec. 1, 2016

Gas up as soon as you can, Tampa Bay.

Local gas price trackers are predicting prices at the pump may rise 10 to 15 cents a gallon in the next couple of weeks thanks to OPEC.

Crude futures surged Wednesday after the Organization of the Petroleum Exporting Countries agreed to reduce its output by more than 1 million barrels a day. The cut, intended to curb a global glut of oil, could be significant enough to push oil supplies below demand sooner than expected.

All of which would lead to higher gas prices.

Gas prices were already on the rise in speculation that OPEC would unite behind a production cut.

In Tampa Bay, prices rose 4 cents a gallon on average for unleaded regular gas between Tuesday and Wednesday, according to AAA's daily fuel gauge report.

But that rise to $2.038 a gallon — which came after a three-week decline that saw gas prices briefly dip below the $2 mark — may be a harbinger of a much steeper rise. Gulf Coast wholesale gasoline, on average, is up 10 cents a gallon just since Monday morning.

Mark Jenkins, spokesman for AAA — the Auto Club Group, said he anticipates prices at the pump rising about 13 cents "probably within the next week and a half if not the next few days."

It's the nature of the beast when it comes to oil price spikes quickly impacting what we see at gas stations. "Retail prices react much quicker to increases in market prices than they do to declines," Jenkins said. "It's likely we will start seeing an impact on pump prices very quickly. This just opens the door for more increases."

Gregg Laskoski, senior petroleum analyst with GasBuddy, noted that gas prices nationally are already up about 3 cents from a week ago.

But predicting the future for gas prices is always tricky.

Even though crude prices shot up $4 a barrel after OPEC's decision, Laskoski said a lot of unanswered questions remain that could stall the industry goal of rebalancing global supply with demand. Among them: Will Russia voluntarily reduce its output as OPEC requests? Will Saudi Arabia, Iraq, Libya and other OPEC members fully comply? Who will monitor the agreement and who will enforce it?

"These are the same issues that have consistently undermined similar OPEC discussions and efforts in the past," Laskoski said.

Contact Jeff Harrington at jharrington@tampabay.com. Follow @JeffMHarrington.

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