Oil Barrel Prices
Oil prices have been climbing ever since the global economy started to recover from Covid-19.
Energy ministers representing Egypt and Cyprus on Monday said they were deeply concerned about the potential for oil prices to climb above $100 a barrel.
By one measure, oil prices could rise to $150 a barrel this year, which would be the highest price ever recorded. And while the Russia-Ukraine standoff is part of the reason for oil’s recent spike, there is more to it.
The U.S. and Europe have threatened to sanction Russia if it invades Ukraine, escalating fears of a possible supply disruption from one of the world’s top producers. Russia has repeatedly denied it is planning to invade Ukraine dispute amassing around 100,000 soldiers on Ukraine’s borders.
There’s been pressure on the Organization of the Petroleum Exporting Countries and key allies like Russia, a group known as OPEC+, to increase supply. But OPEC+ is already struggling to meet its stated goals.
“If the persistent gap between OPEC+ output and its target levels continue, supply tensions will rise, increasing the likelihood of more volatility and upward pressure on prices,” the International Energy Agency said in a report last week.
Higher oil prices could shock the economies of countries that consume lots of oil and hurt consumers’ already-strained pocketbooks.
“With inflation currently at multi-decade highs and uncertainty surrounding the inflation outlook already unprecedented, the last thing the recovering global economy needs is another leg higher in energy prices,” Janet Henry, chief economist at HSBC, told clients earlier this month.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.
