This week saw major headlines for oil markets as Hurricane Ida tore through parts of the southeast and up into the northeast, killing over 40 people. When the category four hurricane hit Louisiana, fuel markets were disrupted as it crushed through towns with winds of 150 mph. Over one million people in New Orleans were left without power immediately following the storm.
Recent reports in Louisiana cities show retail gas prices skyrocketing as a result of the ruptured supply and demand chain. With thousands of electrical workers deployed to start the rebuild process in cities around the state, the Louisiana government warns that it could be weeks until they start to see positive direction. Dozens of rivers in the northeast are also bursting and causing major flooding in cities. Specifically, Philadelphia’s Schuylkill River has not seen water levels this high since 1902. While the major rainfall has stopped, cities face a long stretch of recovery time ahead.
Lastly, in international news, OPEC+ met on Wednesday to discuss their production policies and what to do about increased output. OPEC+ agreed to add 400,000 bpd to the market. OPEC+ also said yesterday that they would raise their 2022 demand forecast, all while facing pressure from the Biden administration to continue increasing output. The question for oil prices now lies in whether the post-pandemic economic recovery will be enough to change the course of prices heading into the later parts of the year.
Prices in Review
WTI Crude opened the week at $69.30. Prices slightly dropped throughout the week before picking back up this morning. Crude opened Friday at $69.76, an increase of $0.46 from Monday.
Diesel opened the week at $2.1299. Similar to crude, diesel was extremely volatile this week. It opened Friday at $2.1621 an increase of $0.0322 from Monday.
Gasoline opened the week at $2.3097. Price increased earlier in the week before falling back down and rising again Friday. Gasoline opened Friday at $2.1577, a decrease of $2.1447.