OPEC, the Organization of the Petroleum Exporting Countries, signaled it will extend output cuts by 1.2 million barrels per day (bpd) for six months, even as tensions in the Middle East flare up.
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The combination, which developed over the weekend, is boosting global oil prices.
“OPEC came out and said ‘we’re staying the course,’ oil prices started to spike up,” Price Futures Group senior analyst Phil Flynn told FOX Business’ Neil Cavuto on Monday. “There are increasing tensions with Iran and the United States, all very bullish for oil.”
The move has U.S. oil prices inching up and hovering around $63 a barrel, while Brent, the global benchmark, is hovering around $72 per barrel.
Americans are closely watching gas prices going into the Memorial Day weekend, the official kickoff of the summer travel season. The national average price of gasoline rose to $2.85 per gallon, according to AAA.
Prices could move even higher says Flynn noting issues with the refineries.
Experts warn that a conflict with Iran would push oil prices well into the triple digits.
On Sunday, President Trump took to Twitter and vowed that a war between the two countries would result in “the official end of Iran.”
“If Iran wants to fight, that will be the official end of Iran. Never threaten the United States again!,” Trump wrote.
Flynn said the tension between Washington D.C. and Tehran is creating volatility for the oil market.
“Donald Trump made it very clear to the Iranians over the weekend, guys, hey, if you attack the U.S. one more time, that’s going to be the end of the regime,” he said.