Crude oil prices could soar into triple digits by the end of next year, potentially swaying Americans’ choices at the ballot box.
Despite growing awareness of the risks posed by extreme climate change, the world’s collective desire for black gold has never been higher.Demand is expected to reach new levels, according to the latest forecast from the International Energy Agency record high Production this year is 102 million barrels per day.
Voluntary production cuts by top oil exporters Saudi Arabia and Russia could push Brent to $107 a barrel by next December, even if it is a surprise, Goldman Sachs analysts predicted in a note to clients.
“We think it is unlikely that the producer group will pursue prices well above $100/bbl,” it said. in a reportincluding the political importance of US gasoline prices.
At stake will be whether the nine countries in the OPEC+ bloc, which includes two emerging economies, decide to extend the cartel-wide production cuts of 1.7 million barrels per day announced in April for the rest of 2024 rather than Cancel half of them.
since falling to near $70 per barrel Brent rebounded to $90 in June amid US debt ceiling talks first time since november On Tuesday, the Saudi royal family warned the market that it would maintain a unilateral July production cut of 1 million barrels per day until the end of the year, based on the cartel’s agreement. Russia added another 300,000 to this figure.
If the investment bank’s gloomy forecast proves correct — rather than its base-case estimate of $93 by the end of 2024 — it could quickly turn into an election issue in next year’s race.
Gas prices are felt in Americans more than elsewhere, thanks to a lower tax percentage in U.S. gasoline prices, lower gas mileage on U.S. cars (primarily large, gas-guzzling pickup trucks and SUVs), and longer daily commutes rise.
Additionally, many other energy commodities tend to take their price cues from crude oil, including heating oil, natural gas and electricity.
The rise in crude oil costs comes at a sensitive time for U.S. consumers.
Savings that served as a financial buffer during the pandemic have largely been depleted, and by October, college graduates are expected to resume paying off federal student debt for the first time since the pandemic. That double whammy has economists predicting that the U.S. could slip into a technical recession as early as the fourth quarter.
Nor is it possible for a Biden administration to deplete the nation’s strategic stockpile like the White House did, at least not as it did last summer.levels have dropped to their level lowest in 40 years.
“The president’s focus is to do everything in his power to get lower gas prices for American consumers,” said national security adviser Jake Sullivan. tell a reporter Tuesday.
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