Crude oil prices rose to their highest level in six years early Tuesday before falling slightly, as rising post-pandemic oil demand and stalled producer negotiations add to the market’s volatility.
By midday Tuesday, futures on West Texas Intermediate, the U.S. oil benchmark, were trading at $73.32 a barrel, down from a high of $76.90 earlier in the day. Since the beginning of the year, the price of WTI oil has risen by more than 50%.
Brent oil futures, the worldwide benchmark, were trading at $74.50 at lunchtime Tuesday, down slightly from their early morning high of $77.82. Brent oil prices have increased by more than 45 percent since the beginning of the year.
The volatility comes as the epidemic is winding down, resulting in a rise in oil demand as businesses reopen and worldwide travel resumes. A meeting of members of the Organization of Petroleum Exporting Countries, which was set for Monday, was also unexpectedly canceled.
OPEC Secretary-General HE Mohammad Sanusi Barkindo did not provide a reason for the last-minute cancellation in a short statement, instead stating that the date of the next meeting will be determined “in due course.” After failing to reach an agreement last week, oil producers were scheduled to discuss output increases.
Americans are likewise experiencing no reprieve from rising gas prices. According to figures from the American Automobile Association, the national average gasoline price was $3.13 per gallon on Tuesday.
Furthermore, the AAA expects that petrol prices will rise another 10 to 20 cents per gallon until the end of August, pushing the national average to over $3.25 by the end of the summer.
“Strong fuel demand and rising crude oil costs are driving up gas prices,” said AAA spokesman Jeanette McGee in a statement. “We had anticipated that increased global crude output would offer some respite at the pump this month, but OPEC talks broke down over the weekend, with no deal achieved. Crude prices are expected to rise to a seven-year high as a result.”
Idaho (which had an average rise of 10 cents), Alaska (which saw a 9 cent increase), as well as Washington, Oregon, and Colorado, witnessed the highest weekly increases at the pump (which all saw an increase of 7 cents).
The last time the national average gas price reached $3.25 was in October 2014, according to AAA.
Since the beginning of the year, gas prices have been gradually rising. On Tuesday, the national average was 95 cents more than it was a year earlier at the same time.