After stooping extremely low earlier this year, oil prices are on the rise after the producers agreed to a deal to cut the output, according to analysts.
Oil prices have increased rapidly — for the first time in months — after Organization of the Petroleum Exporting Countries (OPEC) and several other non-member states agreed to slash their oil output.
During the winters, the oil prices tend to remain low. However, the trend is changing since OPEC’s output-cutting deal on 30th November assured investors that oil’s global surplus would soon ease.
Non-OPEC members, such as Russia and 10 other countries, agreed huge reduction in crude production; to slash output by around 600,000 barrels per day.
The deal itself is seen as historic by many analysts and observers, which will massively impact family budgets as the average per gallon gas cost is set to increase from $2.21 to $3.
Where some analysts predicted the change, others laughed it off.
“There’s no question that 2017 is gonna be more expensive than 2016,” said Tom Kloza, analyst at the Oil Price Information Service.
“But it’s impossible to make a case for it to be anywhere near as expensive as, let’s say, 2011, 12, 13 and 14, when we regularly saw prices go above $3.”
If there is any cap on the gas prices later on, it will be due to U.S. and Canada; where both countries are aiming to speed up the production of the fossil fuel as oil prices are on the rise.