Oil Prices, Brent crude futures, the benchmark, have climbed 16 % in 2024 to just under $90 a level lasted breached in late October. Also, brent crude futures have climbed 18% in 2024 to exceed $90 a barrel for the first time since October (Bloomberg) Due to Drone attacks in Russia, unrest in the Middle East and strong consumer demand have propelled oil prices to their highest level in months, that setting the stage for what could be a summer surge in gas prices.
After an Israeli strike on an Iranian diplomatic building fanned worries of a broader regional war that rally in crude picked up speed this week. Undergirding prices: a relative lack of crude in global markets thanks to production cuts from OPEC and its allies. In year 2024 brent crude futures, the benchmark has climbed 18% to exceed $90 a barrel for the first time since October. That is feeding into gasoline, with average national price measured by AAA up 15% this year 2024 at $3.57 a gallon. “The market in general is only just waking up to just how tight supplies will increasingly be” said by Paul Horsnell, the head of commodities research at Standard Chartered.
Horsnell has been one of the few bullish oil analysts, forecasting that brent will rise to $94 a barrel this quarter. The fact that prices started rising when many on Wall Street expected them to go sideways suggests they could keep heading higher – especially if investors crowed into the trade. Gasoline supplies are a possible pinch point ahead of the busy summer driving season.
The U.S. investors are 3% below the recent average for this of year, closer to lowest for This time of year in the past five years. There is a possibility that a surge in gas prices is avoided. Enhancing profit margins for refiners to crank up output where gas prices have jumped relative to crude and diesel.
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By the summer, U.S. refines will churn through about 700,000 more barrels of crude each day that they were last month, said Janvi Shah, an analyst at consulting firms Rystad Energy – helping meet seasonal gasoline demand but potentially driving crude prices even higher. Bank of Merica analysts figure Brent prices could peak at $95 a barrel this summer, as U.S, Europe and Asia pointing to relatively low gasoline stockpiles. The rise in prices at the gasoline pump comes in the run up to the presidential election. Prices topped out last summer at $3.88 a gallon on average and could tip over $4 depending on how the backing months play out.
More expensive Oil Prices can trickle into prices for other goods and services were as higher crude prices complicated matters for the Federal Reserve. Consumer price inflation in the U.S has gotten stuck at about 3% above the Fed’s target. To some extent it reflected the strength in the world economy due to higher prices foe crude and other raw materials and including copper. The growth appetite for energy has also outpaced efforts to move toward cleaner sources of power, leaving fossil fuels to fill the gap.
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“Sold -out schedule have lifted demand for jet fuel “said by Martijn Rats, head of commodity strategy at Morgan Stanley. Ships are burning more fuel to sail around the southern tip of Africa instead of braving Houthi Missiles in the Red Sea effects to increase in Oil prices. While Brazil and Canada haven’t pumped as much crude as expected in recent months.
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Even, so the International Energy Agency thinks the world will guzzle a record 103 million barrels of each day this year up from less than 102 million last year under 100 million in 2022.