Thursday, July 25, 2024

Crude Oil Surpasses $90 a Barrel, Driving Gas Prices Up

'The national average for a gallon of regular gasoline also increased by five cents last week to $3.41, and prices are only expected to go up...'

(Bethany Blankley, The Center Square) Biden administration policies hostile to domestic oil production coupled with the Russia-Ukraine conflict and OPEC+ policies are contributing to crude oil futures surpassing $90 a barrel in both Brent and West Texas Intermediate benchmarks for the first time since October 2014, industry advocates say.

Both are expected to surpass $100 a barrel this year, with Brent reaching that mark by this summer. Gas prices are also expected to continue rising.

On Thursday, the WTI U.S. benchmark rose above $90 for the first time since 2014; Brent’s international benchmark surpassed $91. As demand for petroleum products surged amid a constrained supply, both benchmarks were headed for their seventh straight weekly gain.

In just one month, “WTI is up nearly 20% for the year, building on 2021′s more than 50% gain. As oil prices push higher, a number of Wall Street analysts have forecasted $100 oil,” CNBC reported.

Both benchmarks rose as geopolitical tensions between Russia and Ukraine escalated and after OPEC+ member countries struggled to meet their production quotas in January.

Last week, OPEC+ member countries agreed to increase production in March by 400,000 barrels per day, which pushed Brent above $90 a barrel. But this may or may not come to fruition since half of its members weren’t able to make their quotas last month, Oilprice.com reported. And they’re unlikely to do so for several reasons, with the exception of Saudi Arabia and the UAE.

The International Energy Agency has warned that OPEC+ spare capacity could be depleted by half by the second half of the year.

A large factor contributing to prices going up, at least domestically, is the Western Energy Alliance and Biden administration policies restricting domestic production of crude over the past year.

The national average for a gallon of regular gasoline also increased by five cents last week to $3.41, and prices are only expected to go up.

Ten states that saw the most recent and largest increases in their average gas prices, AAA reports, are Michigan (+14 cents), Wisconsin (+13 cents), Florida (+12 cents), Kentucky (+12 cents), Ohio (+11 cents), Indiana (+10 cents), Minnesota (+10 cents), Illinois (+8 cents), South Carolina (+8 cents) and Oklahoma (+8 cents).

Texas continues to have the lowest average gas price of $3.01, although in some areas in the Houston-Gulf region, regular gasoline is under $3 a gallon.

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