Last weekend, reports of positive steps toward restoring the Iran nuclear deal made headlines. A US-Iran agreement would increase global oil supplies by nearly 2 million barrels per day, alleviating tight supply concerns. Analysts suggest Iran could unleash its full oil productivity in short order, meaning the price impact would be rapid.
On Tuesday we discussed that the price of everything is going up recently – goods, labor, fuel, even freight prices. In the post-COVID economy, prices are rocketing higher. Some of the statistics you hear lack meaning: consumer prices rising 5% since the bottom of the world’s worst recession isn’t exactly frightening. But in other cases, the rise is undeniable. For instance, fuel prices have rocketed past pre-COVID levels, with analysts increasingly pointing to a $100/bbl target sometime in the next year. Check out Tuesday’s FUELSNews here as we look at three specific areas impacting the downstream fuel landscape: freight, fuel, and DEF.
On Wednesday, oil prices fell back yesterday after hitting a new post-pandemic high on Monday. OPEC+ sources hinted at the possibility of increasing supplies in future months to keep up with rising demand. The group has two particularly troublesome dilemmas – the US and Iran. American shale producers are staying on the sidelines for now, but higher prices could prove too tempting. OPEC’s optimal move here is to increase output just enough to alleviate higher prices. On the other side, an Iran nuclear deal could flood the market with supply, taking away the high prices OPEC+ now enjoys. Here, OPEC’s best option is to maintain cuts. OPEC+’s response to those two strategies will be the single biggest factor impacting prices this year.
This Week in Energy Prices
Today crude opened at a price of $73.32, a change of $1.80 from Monday’s opening price of $71.52. Throughout the week crude rose steadily every day as this morning’s opening price was the highest in a multi-year period. Wednesday’s mid-day high of $74.25 also posted the highest price for crude in a multi-year period.
Today diesel opened at $2.1599, a change of $0.0738 from Monday’s opening price of $2.0861. Thursday’s opening price of $2.1606 represented the highest opening of the week; however, prices remained mostly unchanged in the later parts of the week.
Today gasoline opened at a price of $2.2721, a change of $0.1083 from Monday’s opening price of $2.1638. Gasoline prices throughout the week rose steadily, with the end of the week posting the highest numbers. This morning’s opening price of $2.2721 was the highest of the week.