A growing number of analysts forecast Brent will surpass $100 a barrel this year as demand rises, supply is constrained, and stocks of fuel and crude are relatively low. Retail fuel prices in the U.S. and Europe have risen to multi-month highs as crude prices have rallied.
Good morning, Peter Vanham here in Geneva, filling in for Alan.
Looking a year out, economists don’t just expect “higher for longer” interest rates; that phrase also applies to oil prices, which are predicted to edge up to around $100 per barrel into next summer.
The Biden administration is keen to keep pump prices in check ahead of the presidential election next year, where inflation and fuel costs have already become areas of attack for the Republican party.
After dropping below $70 a barrel (bbl) in early summer, the price of West Texas Intermediate (WTI) crude has been steadily marching higher. Last week, the price breached $90/bbl for the first time in a year, and there are no signs that the rise is slowing.
Further increases would negatively impact consumers, especially for gasoline and transportation costs. While the Federal Reserve’s rate hikes have helped curb inflation, factors like oil supply dynamics are outside their control. Rising oil prices put the Fed’s attempts to engineer a soft landing for the economy in jeopardy.
If Russia and Saudi Arabia want oil prices to rise above $100/bbl — which will hurt President Biden as he heads into an election year — they have the power to make that happen. Given their likely preference for a return of Donald Trump to the White House, I expect them to exercise that power.
Good morning, Peter Vanham here in Geneva, filling in for Alan.
Looking a year out, economists don’t just expect “higher for longer” interest rates; that phrase also applies to oil prices, which are predicted to edge up to around $100 per barrel into next summer.
The Biden administration is keen to keep pump prices in check ahead of the presidential election next year, where inflation and fuel costs have already become areas of attack for the Republican party.
After dropping below $70 a barrel (bbl) in early summer, the price of West Texas Intermediate (WTI) crude has been steadily marching higher. Last week, the price breached $90/bbl for the first time in a year, and there are no signs that the rise is slowing.
Further increases would negatively impact consumers, especially for gasoline and transportation costs. While the Federal Reserve’s rate hikes have helped curb inflation, factors like oil supply dynamics are outside their control. Rising oil prices put the Fed’s attempts to engineer a soft landing for the economy in jeopardy.
If Russia and Saudi Arabia want oil prices to rise above $100/bbl — which will hurt President Biden as he heads into an election year — they have the power to make that happen. Given their likely preference for a return of Donald Trump to the White House, I expect them to exercise that power.