As OPEC predicted that demand would stay strong this year and next, and as the Biden administration persisted in its measures stifling U.S. output, oil prices spiked substantially higher this week.
November’s price is the oil market’s global benchmark, Brent crude futures, which are most directly correlated with US gas prices, saw a morning increase of almost 1.5% before prices eased to a rise of about 1.3 percent. Brent futures reached a high of $92.31 a barrel this week, marking the first time prices have moved above $92 since the month of November.
Even more sharply, U.S. West Texas Intermediate crude prices went up 1.75 percent and hit an all-time high of $89.18 per barrel. It’s also the most expensive it’s been since November.
Last week, Brent went over $90 a barrel for the first time in 10 months. This happened after Saudi Arabia and Russia said they would keep cutting their oil supplies on their own until the end of the year.
This week, OPEC said that even though interest rates are going up, strong economic growth should keep oil demand going up this year and next. This year, the U.S. economy has grown much faster than anyone thought it would. This goes against expectations that the economy would fall into a recession because of tighter monetary policy and a slowing of demand spikes after the pandemic.
Gas prices have gone up because oil prices have gone up. AAA reports that the average price of normal petrol in the country was $3.836 this week, which is higher than the $3.716 it was at this same time last year and the $3.811 that it was just one week ago.
Prices in California are among the highest in the nation. Monday, the average price in California was $5,439. On Tuesday, it went up to $5,464. The average price last week was $5,326. The average price was $5.130 one month ago. Last year, the average price was actually $5.405.
Gas prices are going up a lot in the Midwest. Prices in Iowa, for instance, have increased from $3.549 to $3.930 in the past week.
Just this past week, the Biden administration got rid of the last seven leases for gas and oil in Alaska’s Arctic National Wildlife Refuge. This was the opposite of what the Trump administration did, which was to increase oil production in the area. Biden also wanted to make it harder to build in large parts of the National Petroleum Reserve in Alaska. Biden’s fossil fuel policy record has come under fire from Republicans, who point out that it is hurting energy investment, limiting supply during a period of strong demand, and leaving the United States more susceptible to decisions made in Riyadh and Moscow.
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