Knoxville – Fuel prices are expected to slowly increase as oil-producing countries cut their production levels.
A University of Tennessee-Chattanooga oil industry analyst said no one in the business was surprised by the production cuts.
“This was expected,” said Dr. Ziad Keilany, Guerry Professor of Economics at UTC, “and in fact, the market already factored that in, which is why prices went up even before the production cuts took place. Prices are likely to rise a little more when the cuts are completed.”
Most of the OPEC cartel members agreed to the cuts in oil production, Keilany said, but Iraq is still a question mark.
“Iraq was pumping close to 3.5 million barrels a day, and for a number of reasons, cut it down to 1.5 million barrels,” Keilany said. “The question now is what Iraq is going to do: increase production, keep it at the same amount, or cut it even further. We don-t know, because Iraq is one of the most unpredictable countries in the world.”
Gasoline prices in Tennessee have risen 5 cents per gallon on average from December to January.