US Oil Prices Surge Above $90 a Barrel, Threatening Inflation and Gasoline Prices
New York (CNN) – US oil prices have climbed above $90 a barrel for the first time in 10 months, posing a threat to the economy by potentially driving up inflation and gasoline prices. The rise in oil prices has created an unusual situation where gasoline is becoming more expensive even after the end of the summer driving season. Despite a decrease in demand, gas prices are just pennies away from reaching their highest level of the year.
According to AAA, the national average for regular gasoline has risen to $3.86 a gallon, which is six cents higher than a week ago and 16 cents higher than the same day last year. This increase in oil prices has been driven by concerns about supply. Last week, Saudi Arabia and Russia surprised the market by extending their aggressive supply cuts through the end of the year, resulting in a rally in the oil market. Additionally, catastrophic flooding in Libya has raised concerns about potential supply disruptions in the OPEC nation, which produces about 1 million barrels of oil per day.
The loss of supply in Europe could lead to even higher prices and attract more barrels from the US to fill the gap. As a result, US crude traded as high as $90.26 a barrel on Thursday morning, the highest intraday price since November 8, 2022, and a 34% increase since mid-June. Brent crude, the world benchmark, also climbed 2% to a fresh 10-month high of $93.68 a barrel on Thursday.
The recent surge in energy prices is undoing some of the progress made by central banks in the fight against inflation. Inflation reports released this week showed prices rose more than expected in August, largely due to rising gas prices. Energy prices have continued to rise throughout the month. This increase in oil prices has led to a dozen US states averaging $4 a gallon or higher for regular gasoline, including Colorado, North Dakota, and California.
The impact of these rising oil prices on the economy and consumers remains to be seen. However, if prices continue to climb, it could lead to higher inflation and put a strain on households already grappling with rising costs. As the situation develops, experts will closely monitor the oil market and its potential effects on the global economy.
Original Story at www.cnn.com – 2023-09-15 00:07:00
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