Gas prices increased across the board in the last week, up a penny in Buffalo and Rochester, and up even more statewide and nationally, according to AAA.
The price of a gallon of regular unleaded gasoline in Buffalo is now $2.34 per gallon. In Rochester, that same gas is $2.33. The statewide average is $2.39 — three cents higher than a week ago. The national average is up five cents to $2.18.
On Wednesday, the 14 countries comprising OPEC reached an oil production agreement. Beginning on January 1, 2017, OPEC is set to cut production by 1.2 million barrels per day or 1 percent of total global oil production. Non-OPEC countries, including Russia, have signaled that they are prepared to participate in the agreement as well. The goal is to rebalance the oil market – the global oil supply has experienced a surplus in recent years that pushed oil prices lower.
As a result of the announcement, markets reacted quickly, and crude oil prices increased, which impacted gas prices. Prior to the OPEC agreement being reached, retail gasoline prices were in line to drop toward the $2.00 a gallon level in December. It is still possible for prices to get there since demand remains relatively flat and inventories have grown over the past three weeks, but the path back to $2.00 may get delayed as a result of the OPEC production cut announcement. Any lingering impact on prices will depend on whether OPEC follows through and successfully implements the cuts in 2017.
