Fuel prices are near record highs after rising fears of tight supplies and new sanctions against Russia.
Fuel prices are near new record highs. Oil prices rose by 3% this Wednesday morning, and gasoline is getting closer to the 11th March record of $4.33 per gallon. The Russian war and its impact are putting their sheds on the American energy sectors including oil and gasoline.
Western countries have proposed isolating Russia from the OPEC members as a means of lowering oil prices. Saudi Arabia declined that suggestion, saying that Russia would not be removed from the OPEC members.
The U.S. is looking to implement new and aggressive sanctions against Russia after the fresh rebound in Russian exports and the value of the rubble market.
As for the oil prices in the U.S, here is the recent news.
The West Texas Intermediate crude was worth about $107 per barrel, meaning an increase of 3.4%. Brent crude rose by 2.9% this morning to be worth $119.46 per barrel. Gasoline prices have increased and now are valued at an average of $4.23 per gallon. This is the highest record since March 11, when gasoline prices set new highs of $4.33 per gallon.
Furthermore, the United States economy is regarded as the largest economy that relies on oil energy and gases for industrial purposes. On top of that, consumer gasoline demand remains solid and is increasing day after day. Recent data indicate that the American economy is under massive pressure as a result of tight oil supplies and increasing prices.
At first, the fears were not that high, but after last week’s report that was issued by the energy information administration, the fears are growing rapidly. The U.S. stockpiles declined faster than expected, leaving the market in a vulnerable situation.
Some of the dates that the U.S. Energy Information Administration issued:
The drop in crude inventory was catastrophic, coming in at three times the amount predicted by most analysts. Prior week’s numbers indicate that the crude inventories declined by 3.449 million barrels, while most experts predict that it will decline at most by 1.022 million barrels.
The drop in the number of barrels is a strong indicator of a sharp supply shortage in crude inventories. On the other hand, the distillate stockpiles index recorded an increase of 1.394 million barrels. However, the number of increases is still slightly lower compared to the expected increases, which is 1.500 million barrels.
The energy sector is still in a struggle as it appeared, and that’s what the gasoline inventory index hints at. Last week, gasoline inventories increased by half of what was expected, to 785.000 barrels.
From a consumer’s point of view, the increase in gasoline prices and the decrease in gasoline supplies are terrifying. Average American buyers are getting overwhelmed because of their inability to fulfill their energy supplies.
Investors are betting on the Russian government’s recent announcement that military operations in Kyiv will cease. Nonetheless, after being fooled once by Putin, things are not going well in the oil stock market.