Fuel Prices To Hit $2.55 By Christmas With Help From OPEC
Is your wallet feeling heavier these days, despite all of the blackened Thanksgivings and cybernetic Mondays meant to liberate you from your money? It’s about to become more so, thanks to an early Christmas present from OPEC.
CNBC reports OPEC decided in its meeting last week not to cut back oil production, preferring to defend its piece of the petroleum pie from shale drillers in the United States, whose efforts added 1 million barrels/day to the nation’s oil production in less than a year.
In turn, prices for West Texas Intermediate fell to $66.15/barrel, while fuel prices averaged $2.79/gallon over Thanksgiving, the lowest average since the same time in 2009. The price is expected to fall further, per Lipow Oil Associates president Andrew Lipow, who expects the average to hit between $2.55 and $2.60 per gallon nationwide by Christmas.
However, if OPEC hoped to thwart U.S. production — currently at 9 million barrels per day, a rate not seen since 1986 — the organization may be in for a shock. Lipow explains:
I expect oil production is going to continue to increase in the U.S. over the next three to four months as shale oil and Gulf of Mexico projects that are underway get completed.
Meanwhile, production at existing wells would be cut back as exploration and production companies look to refocus their budgets toward the most productive sites.
Seattle-based writer, blogger, and photographer for many a publication. Born in Louisville. Raised in Kansas. Where I lay my head is home.
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