This morning, crude and diesel both opened with 3-year highs at $68.76 and $2.1061, respectively. As the demand for travel starts to slowly make its way back into the daily lives of consumers, oil prices are expected to climb to as high as $80 this summer.
After the economy reopened following COVID-19, prices rose as high as 40% at the beginning of the year, but new reports of expected travel this summer could cause prices to rise even higher. On Wednesday, retail gasoline was averaging at around $3.04 per gallon, a 50% increase from a year ago. The peak that consumers normally witness during the beginning of the summer is not expected to fully summit until later in the season.
According to Francisco Blanch, global commodities and derivatives strategist at Bank of America, “Demand is ramping up very quickly because everybody’s driving, and we have the reopening of Europe, which is really starting to happen.” The uncertainty around higher oil prices have paved the way for energy analysts across the globe to come to an agreement that oil prices are headed for a period of extremely high prices; however, they cannot agree on how long this period will last. Blanch predicts that consumers could see oil rise as high as $100 per barrel, but it is still far too early to tell. With OPEC+ slowly returning more oil to the market, things are starting to look more positive for consumers; however, the rising demand amid the COVID-19 recovery is far from gone.