VIRGINIA BEACH, VA (January 23, 2017) – Gas prices have continued to drop for 13 consecutive days in Virginia. Today’s average price in the Commonwealth is $2.18, which is four cents less than last week, although still four cents higher than last month and 49 cents more than last year. Hampton Roads is also seeing lower prices, currently averaging $2.15 which is five cents less than last week, but still five cents higher than last month and 52 cents greater than last year.
Fortunately, the national average price of gas continues to decline as U.S. oil production increases. Today’s gas price of $2.31 per gallon represents a decrease of three cents per gallon on the week and four cents on the month. Prices have declined for 14 of the past 15 days. Despite this recent trend, retail averages are still up by 46 cents per gallon as compared to one year ago.
At Sunday’s OPEC meeting, energy ministers announced that the cartel has successfully limited oil output in an effort to reduce oversupply and support crude oil prices. At the meeting, OPEC announced that participating countries had already cut production by 1.5 million barrels per day. Eleven of OPEC's 13 members along with 11 non-OPEC countries struck an agreement last November to cut production collectively by 1.8 million barrels per day for the first six months of 2017. Participating members also agreed to create a joint technical committee (JTC) to work with the OPEC Secretariat in assembling a production data report that will be released the 17th of every month. The JTC will meet again on March 17 in Kuwait.
OPEC’s production announcement did little to impact crude oil futures, which were trading lower early Monday. The drop is likely a result of an increase in U.S. oil production as evidenced by the 35 additional oilrigs reported by Baker Hughes. The introduction of these new rigs brings the total U.S. rig count to 694, which represents a significant increase in output counteracting OPEC's production cut. Traders will keep a close eye on how OPEC output cuts and increased U.S. production impact the market moving forward. At the close of Friday’s formal trading session on the NYMEX, WTI closed up $1.05 to settle at $52.42 per barrel.
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