Following Thursday’s meeting at the Organization of Petroleum Exporting Countries, there appears to be no meaningful increase in oil production, according to a report by the travel and navigation app GasBuddy. The report predicts the national average for gasoline will jump to $3 a gallon by Memorial Day as OPEC’s production cuts remain steady.
“Large cuts to oil production in 2020 will generally be extended, with just Russia and Kazakhstan granted small exemptions to raise oil production by 130,000 barrels a day and 20,000 barrels a day, respectively,” said Patrick DeHaan, head of petroleum analysis at GasBuddy. DeHaan said in response, crude oil prices rose to fresh highs, with a barrel of West Texas Intermediate crude oil nearing $65 per barrel, the highest level since 2019.
At the state level, four of the nine oil crude blends in Kansas saw a $2.55 increase from the previous week including Central Kansas Sweet ($53.91/barrel), Eastern Kansas Common ($50.56/barrel), Northwest Kansas Sweet ($51.81/barrel) and Southwestern Kansas Sweet ($52.31/barrel). Kansas Common rose $2.53 to $51.77/barrel while Kansas Crude and Southwest Kansas Crude jumped $2.50 to $59.29 and 52.93/barrel respectively. Eastern Kansas and South Central Kansas Crude dropped 25 cents to $47.75 and $52.25/barrel respectively.
The price jumps in oil have not gone unnoticed at area filling stations. In Barton County and neighboring Pawnee, Stafford, Ellsworth and Russell counties, the average price for a gallon of regular unleaded is $2.55. Rice County is averaging 2 cents cheaper at $2.53.
In the past week, Kansas motorists experienced their cheapest price at the pump at $1.99 in Garnett while $3.04 was reported as the most expensive, which is 4 cents more than the GasBuddy predicted national average for May.
“The last time the national average reached the $3/gal threshold was over six years ago,” DeHaan said noting that in 2018, the national average crept to $3 at $2.97.
DeHaan attributes much of GasBuddy’s prediction of a $3 national average to OPEC’s delay in raising production to meet the global rise in demand. “As vaccines have spread country to country, demand for oil has rebounded notably,” he said. DeHaan added that OPEC cut some 10 million barrels per day of oil production, which largely remains the case to date, as OPEC has not yet responded in kind to the rebound in global demand.