BALTIMORE (WJZ) — For the first time in 8 years, OPEC decided to cut oil production by more than a million barrels a day.
Experts say the ripple effects are already being felt at some gas pumps.
WJZ checked stats with AAA and the average cost per gallon is $2.18. That’s just one penny more than a week ago, but experts say don’t get comfortable. One expert tells WJZ me an unpleasant change may be just around the corner.
The decision made all the way around the world, will have a trickle down effect. Organization of the Petroleum Exporting Countries or OPEC, has struggled to keep it’s grip on the market over the past few years because of increased competition, so the group decided to slash production by more than one million barrels a day. It’s an attempt to regain dominance in a competitive market.
That decision had an almost instantaneous impact, as prices shot up by more than nine percent, to nearly $50 a barrel. After months of back and forth, the oil producing nations decided to cut production on Wednesday. Experts say, within hours some gas stations saw a spike in prices.
“And if those cost increases are passed along to gasoline prices, which presumably they will be, that could mean that gasoline prices here in Maryland could rise, 10, 15, 20 cents a gallon very quickly,” said economist Anirban Basu.
For consumers who have been spoiled by lower gas prices, this isn’t what they want to hear.
“We’ve seen it, it can go high, who knows, where will it stop?” said driver Lisa Gallagher.
“The most I’ve paid, about 3.20, and at that time it was pushing it. If it goes beyond that, I can see mass hysteria,” said driver Jerrill Sankey.
Even though higher prices are inevitable, Basu says consumers shouldn’t panic.
“Prices are going to be a bit higher than they have been, but they are certainly much lower than they were let’s say in 2008, or 2014. We can probably live with these prices,” said Basu.
Even though the change may be sneaking in at the pumps, this agreement doesn’t officially go into effect till January. Even then, Basu says it could all fall apart if just one country goes rogue. OPEC says there are countries that are not a part of their organization that are also prepared to cut oil production.