This week brought a sharp break from rising oil prices, with crude oil shedding several dollars from its lofty prices. Saudi Arabia and the UAE’s compromise on Wednesday paved the way for OPEC+ to begin hiking their output each month, bringing markets closer to balance. Even with the agreement, though, some forecasters are still calling for oil prices to rise to $80/bbl this summer before cooling in Q4.
The Saudi-UAE agreement will enable the UAE to pump more oil after the original OPEC+ deal expires in April 2022, though not quite as much as the UAE’s original request. Now that both parties agree, OPEC+ can move forward with increasing output by 400 kbpd each month while also extending cuts from April 2022 until the end of next year.
Retail gasoline prices hit an 8-year high earlier this week, before the OPEC deal sent prices lower. With prices at the pump well over $3 in many areas of the United States, gasoline is almost a dollar higher than it was last year. Gas prices are expected to remain high for some time until the supply chain can balance out, but the OPEC+ deal will undoubtedly help with subduing high retail prices in the future.
This Week in Energy Prices
Today crude opened at a price of $71.48, a change of $3.26 from Monday’s opening price of $74.74. Crude dropped this week especially on Wednesday following the announcement of the OPEC+ deal. Today’s opening price of crude was the lowest in a one-month period.
Today diesel opened at $2.1034, a change of $0.0493 from Monday’s opening price of $2.1527. Tuesday’s opening price of $2.1034 represented the lowest opening in a two-week period, and prices showed many changes throughout the week, with the biggest drop off happening between Wednesday and Thursday.
Today gasoline opened at a price of $2.2456, a change of $0.0413 from Monday’s opening price of $2.2869. Prices shifted throughout the week in correlation with the ongoing volatility shown in crude and diesel. Gasoline showed its highest drop off between Thursday and Friday.