What Does OPEC+ Production Cut Mean for Gas Prices?

The OPEC+ oil cartel is set to cut supplies further in 2024, a move that unexpectedly sent oil prices lower and exposed the group’s waning influence on the world’s most traded commodity. The price of oil is the biggest factor that determines how much motorists pay at the gas pump. So OPEC+’s struggles to remain relevant — and the increasing power of robot traders — have consequences for consumers.

The Saudi-led group of oil-producing nations agreed on Nov. 30 to cut an additional 900,000 barrels a day of oil output in the first quarter of 2024. That comes on top of a voluntary 1 million barrel-a-day cut by Saudi Arabia that’s already in place. The move is aimed at eroding an oil surplus expected next year. But because the new cut is voluntary, traders weren’t convinced the deal will materially tighten the market, and the US benchmark West Texas Intermediate tumbled following the announcement. On Dec. 21, Angola said it would leave the cartel after rejecting the reduced output limit.