Oil prices are trading lower this morning as fears of rising inflation continue to hit the market. In October, inflation was the highest it had ever been in 31 years. Now, the Biden administration is facing more trouble ahead as they try to navigate this problem along with other major issues the White House is dealing with such as the ongoing conversations with OPEC+ regarding output. Today crude oil opened at $81.41, diesel at $2.4470, and gasoline at $2.2961.
Yesterday, data was released showing inflation rose 6.2%. This is the highest inflation level in over 30 years, causing a higher U.S. dollar while driving oil prices down. While rising inflation has been a recurring theme, only now is it starting to spiral into widespread market fear. The President has asked the National Economic Council to help reduce energy costs and has also asked the Federal Trade Commission to help reverse inflation in the energy sector using anti-market manipulation techniques. The energy sector, however, is just one of many channels being affected by rising inflation, so something must be done quickly to reverse this trend.
With the nation already on edge about rising oil prices, adding record inflation numbers to the mix is sure to stir the pot of pessimism. Recent data shows that because U.S. oil producer costs also increased significantly in October, inflation could be far from over. While analysts suggest that inflation has not reached its peak, and that we are in for a long-lasting rising inflation period, if OPEC responds to international calls to speed up production then we may start to see price reductions across the country.