OK Oil Industry Could Feel Impact If OPEC Cuts Production

Wednesday, September 28th 2016, 10:54 pm
By: News On 6

OPEC, the group that regulates oil prices and global supply, is thinking about curbing production this fall.

The proposal could affect Oklahoma’s largest industry and may have an impact on prices at the pump.

One expert said he expects a slight rise in gas prices, but most of that is tied with refineries going through routine maintenance.

He said prices will eventually fall with the production of a winter blend gas.

When you hear news about cuts in oil production, you look right to gas prices.

TU professor of energy business, Tom Seng, said, “You can fully expect the gas prices at the pump are going to go up - fall back to winter.

Drivers enjoyed $1.69 gasoline back in February, but the low oil prices forced large oil company layoffs and drilling rigs across the country to be idled.

Oklahoma's oil industry took a hit earlier this year, but Seng said the effects of the downturn are stabilizing across the state.

"This could really turn out to be somewhat of a token gesture that spooks the market for a little bit,” he said. “We get stronger prices and then things settle back down."

OPEC, the group of oil-producing nations that controls price and supply, is thinking about cutting production up to 700,000 barrels a day.

Seng said, "Since we're talking globally, this to me is going to have a minimalistic impact."

Seng doesn't expect the latest proposal by OPEC to have a long-term impact on U.S. oil production and prices.

"We've managed to stay in this $40-$45 (per barrel of oil) range, and if news like this can help us hang in there, so much the better," the professor said.

Experts say the cut in global production could cause a slight bump in gasoline prices, but Seng says we won't know for sure until November when OPEC makes a final decision.