Why Are Oil Prices So High and Will They Stay That Way?
Oil prices are increasing, again, casting a shadow over the economy, driving up inflation and eroding consumer confidence. Crude prices rose more than 15 percent in January alone, with the global benchmark price crossing $90 a barrel for the first time in more than seven years, as fears of a Russian invasion of Ukraine grew. Though the summer driving season is still months away, the average price for regular gasoline is fast approaching $3.40 a gallon, roughly a dollar higher than it was a year ago, according to AAA. Click Here to read more from The New York Times.
OPEC and Russia keep promising to pump more oil. They’re not delivering
Here’s one big reason oil prices are near a seven-year high: OPEC and Russia are producing less than they promised. The Organization of the Petroleum Exporting Countries and 10 other major crude oil producers, including Russia, have been gradually increasing their output after taking 9.7 million barrels per day out of the market as demand collapsed in the early days of the coronavirus pandemic. Click Here to read more from CNN.
Putin accuses U.S. of trying to lure Russia into war
Russian President Vladimir Putin accused the West on Tuesday of deliberately creating a scenario designed to lure it into war and ignoring Russia’s security concerns over Ukraine. In his first direct public comments on the crisis for nearly six weeks, a defiant Putin showed no sign of backing down from security demands that the West has called non-starters and a possible excuse to launch an invasion, which Moscow denies. Click Here to read more from Reuters.
Will $100 Oil Finally Bring About Demand Destruction?
Brent hit $90 a barrel last week as geopolitical concerns and a tight market combined to drive oil prices higher. At the start of this week, Brent traded at over $91 and WTI reached $88 per barrel, while major investment banks and forecasters—and even oil majors—say that $100 oil is on the cards later this year. Lower-than-normal petroleum inventories, including in the United States, a slower-than-expected supply response to high prices, and declining global spare production capacity amid continuously recovering oil demand could push oil prices to triple digits as soon as this summer, several Wall Street banks have said in recent weeks. Click Here to read more from Oil Price.