BUFFALO, N.Y. (WBEN) Suddenly, drivers are paying attention to gas prices again.
Many people felt a jolt last week as prices at some gas stations
jumped as much as 30-cents a gallon. Then on Sunday, OPEC announced
an unexpected production cut that will take effect in May, and just the
announcement alone sent prices up again.
Denton Cinquegrana, Chief Oil Analyst for OPIS, the Oil Price Information
Service, told WBEN that two things are at play. "First, this is the time
of year when gas prices normally go up. We're transitioning from winter
grade gasoline to summer grade gasoline. Plus, US gasoline inventories
are running below where they might normally be.
Because of the transition, which takes a few weeks to complete, Cinquegrana
expects gasoline supply to be a little tight through the month of April.
The current average price of gas in the Buffalo area according to AAA is $3.47. One week ago the average was 13 cents lower and a year ago we were already paying more than 4 dollars a gallon.
Regarding the surprise decision by OPEC to cut production in May, OPIS had oil prices as of Tuesday morning at around $81 dollars a barrel. Cinquegrana said we have already been at that level this year and he does not foresee oil prices reaching $100 dollar a barrel, a magic number often referenced in the oil industry.
Does he expect uncertainty and a tumultuous time with oil prices, similar to
last year? "No. I think we're going to be pretty stable. I don't see triple digit oil prices this summer unless there's some sort of disruption to supply that's more long term." If oil prices do climb, he doesn't expect them to be there for long.
"I don't think we'll see $5 gasoline again unless something unpredictable happens, such as a hurricane taking out a bunch of refineries. I think we'll struggle to get to $4, and if we do, it's not going to be there for very long," he added.