AUSTIN (KXAN) — If you’ve filled up your gas tank at the pump lately, you’ve likely noticed gas prices are ticking up, albeit slowly.
AAA said the average price for a gallon of gas in the Austin area is about $3.27 a gallon, up roughly six cents from a month ago.
The steady uptick comes in the days after the Organization of the Petroleum Exporting Countries, better known as OPEC, announced its plans to cut the amount of oil it produces and distributes to the global market.
President Joe Biden and his administration have pushed back against the plan, saying the U.S. would be reevaluating its relationship with Saudi Arabia, OPEC’s biggest oil producer.
University of Texas Professor and Distinguished Oil and Gas Scholar Owen Anderson talked with KXAN’s Tom Miller about what the cut could mean for Texas.
This interview has been lightly edited for length and clarity.
Tom Miller: Can you explain what OPEC is?
Professor Owen Anderson: OPEC is 13 oil-producing countries of which Saudi Arabia is the largest and most influential producer. These countries meet periodically to determine how much oil members will actually produce over a given period of time, usually a quarter.
Miller: There was a recent decision about cutting oil production. What are they looking at?
Anderson: OPEC determines the production volume by looking at economic forecasts, and its most recent forecast was slowing growth due to efforts to fight inflation, which OPEC is concerned will trigger a recession. So they agreed to cut production by two million barrels of oil per day. That amount is then allocated among member countries.
Miller: Why was this controversial here?
Anderson: If OPEC members honor their quotas, this would probably mean higher oil prices at the pump and more inflation. Of course, that’s good for oil-producing state economies such as West Texas, but it puts added strain on consumers due to inflation.
Miller: If we do see OPEC sticking to that two million barrels of oil cut — how high could we see oil prices go here as a result of this?
Anderson: I would imagine that the range of prices would be maybe $80 to $110 a barrel. I think it’s probably likely to be less than $100 (per barrel) mostly.