Northwest Iowa — If it seems as though gas prices have been going up over the past couple of weeks, you’re not imagining things. The national average has increased for 14 days in a row following the OPEC oil production agreement on November 30th. The average nationwide price of $2.21 per gallon is up three cents per gallon on the week and two cents per gallon on the month. The national average is up 20 cents compared to the same date last year. Here in our area, prices as of Monday morning were within a few cents of the $2.14 per gallon price displayed at stations in Sheldon. Statewide, Iowa’s average price per gallon is $2.15, with Minnesota prices coming in a dime cheaper, at $2.05.
Last month, OPEC agreed to cut output by 1.2 million barrels per day beginning January, 2017 and markets have continued to react to the production cut agreement with crude oil prices hitting an 18 month high. Retail prices have steadily increased following the news of the OPEC agreement, but the effectiveness of the deal and continued market impacts will hinge on all countries implementing the agreed to production levels.
Over the weekend, OPEC and non-OPEC producers reached their first deal since 2001 to limit oil output in an effort to reduce global over supply and rebalance the market. Producers from outside the 14-country group agreed to reduce output by 558,000 barrels per day. Of that amount, Russia has agreed to cut 300,000 barrels per day with the remaining non-OPEC members cutting the remaining 258,000 barrels to reach the agreed upon levels. As a result, traders will continue to watch how OPEC and non-OPEC members move forward with the terms of the agreement starting in 2017.
