Thank OPEC+ for high gas prices, AAA says

Oct. 10 (UPI) -- Last week's decision from the OPEC+ group to trim production allotments come November is creating more pain at the pump for U.S. drivers, motor club AAA said Monday.

The travel club lists a national average retail price of $3.91 per gallon for Monday. Due to hefty state taxes, California has the highest average price in the Lower 48 at $6.33 per gallon. Because it's situated close to a dense network of refineries, meanwhile, Mississippi has the lowest average price at $3.26 per gallon.

Regardless of where you live, prices at the pump are on the rise. AAA recorded the national average at $3.79 per gallon one week ago.

Crude oil prices account for the bulk of what consumers see at the filling station and for Brent crude oil, the global benchmark for the price of oil, the price is up about 9%, or nearly $10 per barrel, from a week ago.

AAA said Monday the decision from the Organization of the Petroleum Exporting Countries and their non-member state allies, a group known as OPEC+, to cut 2 million barrels per day from their collective production quotas is the main reason prices at the pump have increased.

"A higher cost for oil usually means more expensive gasoline," AAA said. "Meanwhile, domestic demand increased as more drivers fueled up last week."

Midwest prices had been on the rise due to refinery issues, including an explosion at a BP refinery in Ohio that killed two people. Ohio's gas prices followed national trends over the last week, however.

Gasoline prices are a growing concern for President Joe Biden and his fellow Democrats in the weeks leading up to midterm elections in November. Biden's team was less than thrilled with the decision from OPEC+. U.S. Treasury secretary Janet Yellen characterized the decision as "unhelpful and unwise."

Energy prices account for the bulk of the increase in consumer prices, increases that threaten to push the U.S. economy into a recession. That would only give competing Republicans more talking points as Election Day draws near.

The Energy Department said it in a monthly market report for September it anticipated a national average price of $3.60 per gallon for the fourth quarter. That estimate will be updated when the October report is published on Wednesday.

"For now, I don't expect much improvement in prices for most of the country, with California and the Great Lakes as the exception, with downdrafts likely in the days and weeks ahead," Patrick DeHaan, the senior petroleum analyst at price-watcher GasBuddy, wrote in a Monday blog post.

The national average is still far below the $5.22 per gallon recorded in June.