Start revving those engines and planning late summer road trips because gas prices might drop in August.
Eight members of OPEC Plus announced on Saturday that they will increase oil production by 548,000 barrels a day. The group—which includes Saudi Arabia, Russia, the UAE, Kuwait, Oman, Iraq, Kazakhstan, and Algeria—will increase global production by about half a percent.
Analysts were expecting a slightly smaller increase for the back half of the summer and believe that the additional supply will likely surpass demand, lowering prices. They expect crude oil prices to fall from $68 per barrel last week down to the $50–$60 range later this year, the New York Times reported.
OPEC Plus wrote that “a steady global economic outlook and current healthy market fundamentals” contributed to the increase. Aside from a brief spike in prices, the oil industry appears unfazed by the conflict between Israel and Iran. But some analysts see some ulterior motives.
According to the New York Times, the boost in production appears to be motivated by two factors outside of economic conditions—to please President Trump and to punish OPEC members who were overproducing.
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