Earlier this week, gas prices hit a seven-year high, reaching $84.60 a barrel. But a larger-than-expected crude oil inventory build for the week could halt the crude oil rally, according to OilPrice.com. Gas production increased to 9.6 million barrels per day, according to the Energy Information Administration’s report for last week.
Will the latest figures result in lower prices at the pump? The price dip seems to be a temporary situation, as long as the Organization of Petroleum Exporting Countries and their allies (OPEC+) choose to limit output. Oil production was scaled back in 2020 and still has not reached pre-pandemic levels, according to CrossroadsToday.com.
With 427 million barrels, U.S. crude oil inventories are roughly 6% below the five-year average, leading to rising prices at the pump. The EIA estimated a 2 million-barrel draw last week, compared to 3.5 million in the two weeks prior. So far, however, inventory builds have failed to slow rising prices, OilPrice.com reported.
The price for Brent crude oil has been on a five-week rally, leading to record highs. U.S. West Texas Intermediate crude (WTI) has risen for the past seven weeks. For the first time Wednesday, Brent fell 23 cents, while WTI gained just 12 cents to settle just about $1 below its high for the week, Reuters reported.
According to GOBankingRates, the Biden Administration revealed that it’s considering several steps to stem rising gas prices, including temporarily banning crude oil exports to bolster our supply or even releasing the Strategic Petroleum Reserve, a supply of oil held by the U.S. in salt caverns along the Gulf of Mexico coastline. The reserves are designed to be released only to reduce disruptions in supplies of petroleum products such as gasoline and home heating oil. These reserves have only been sold three times in history, says the U.S. Office of Fossil Energy and Carbon Management.
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