Last weekend, OPEC announced a production cut of over a million barrels per day, causing crude oil prices to surge above $80 a barrel and the national average for regular gasoline to increase by seven cents to $3.55. The production cut has direct implications for small business owners, as fuel prices contribute significantly to operational costs.
Andrew Gross, AAA spokesperson, explained that oil prices account for over 50% of the cost at the pump, so drivers may not see relief soon.
The Energy Information Administration (EIA) data showed that gas demand increased slightly from 9.15 to 9.3 million b/d last week, while total domestic gasoline stocks decreased by 4.1 million bbl to 222.6 million bbl. Higher demand amid tighter supply has driven up pump prices, and they may continue to rise if demand persists.
Small businesses relying on transportation and logistics could face challenges due to these price hikes, which may affect overall operational expenses and profitability.
This article, “OPEC Production Cut Raises Gas Prices for US Consumers” was first published on Small Business Trends