Gas prices expected to rise in Ohio, Kentucky after OPEC+ countries cut oil output

Sunday's decision by Saudi Arabia and other big oil producing-countries to cut output sent the price of a barrel of oil jumping this week, a price increase that figures to make its way to gas pumps soon.

Gasoline prices already are up 20 cents per gallon in Ohio over the past week, even before the announcement by OPEC+ countries, and comes at a time when prices tend to move higher as the summer driving season approaches.

Gas prices: See a history of Ohio and national average gas prices

What happened with oil prices?

The OPEC+ countries announced on Sunday production cuts of more than 1 million barrels of crude per day, and that sent oil prices jumping nearly $5 a barrel on Monday and another dollar on Tuesday to push prices back to more than $80 a barrel.

The cut are expected to start in May and continue through the rest of the year.

The move caught oil analysts by surprise.

So what will happen with prices at the pump?

Prices in Ohio average $3.42 per gallon as of Monday, up 20 cents over the past week, according to AAA. In Kentucky, the average price has risen from $3.19 to $3.28 per gallon and in Indiana, the average price has slightly increased from $3.51 to $3.56.

In Cincinnati, prices averaged $3.59, an increase of 34 cents from a month ago.

Prices typically head higher in the spring as demand rises, refineries shut down for maintenance and production begins of more expensive, summer blends of fuel.

“Our experts are projecting we will see gas prices increases as a result of this," Ohio AAA said. "We are getting ready to head into what is expected to be a very busy travel season. Tight supply and high demand will likely drive up gas prices.”

AAA said it couldn't predict how much of an increase drivers will see or when it will show up at the pump.

In the case of Ohio, there's added pressure from a key refinery in the Toledo area has been closed since last fall when there was an explosion that killed two workers.

Cenovus Energy, which recently took full ownership of the bp-Husky Toledo Refinery, expects the refinery to resume full production this spring.

Is there any good news?

At this time a year ago, prices were nearly $4 a gallon and on their way to a $5.06 a gallon as Russia's invasion of Ukraine upset oil markets.

Even with the expected increase in gasoline prices from the move by the OPEC+ countries, drivers should expect to pay $1.25 to $1.50 less per gallon this spring compared with last year's peak, according to Tom Kloza, oil analyst and a founder of the Oil Price Information Service.

Without OPEC+'s action, the price drop might have been $1.50 to $1.60 per gallon, he said.

Will the higher price stick?

An expected slowdown in the U.S. economy could make it harder for the price increase to stick since recessions normally hurt demand for fuel, and the OPEC+ countries may be fearful of a significant drop in prices.

The action by the OPEC+ countries could firm up prices for now, but whether those prices hold is hard to say, Kloza said.

Oil prices hit $120 a barrel last summer only to fall to $73 last month.

Other analysts say this move could be the start of a push that could take oil prices back toward $100 a barrel, helped by the reopening of the Chinese economy from the pandemic that help demand for oil.

This article originally appeared on The Columbus Dispatch: How will OPEC cuts affect gas prices in Ohio, Kentucky?

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