Pumped up… Gas prices hit their highest seasonal level in over a decade after Saudi Arabia and Russia said they’d continue to curb oil production through December. They’ll trim production by a combined 1.3M barrels/day, or ~1% of global supply. Major oil-price benchmarks jumped to their highest levels of the year, while the average price at US pumps rose to $3.81/gallon, the second-highest level since 1994. The TL;DR: it’s not a great time to go on a road trip.
Running on E: The US keeps a stockpile of oil to ease rising prices when supply is tight, but after President Biden tapped a record amount last year following Russia’s invasion of Ukraine, the reserve is sitting at a 40-year low.
Tapping liquid gold… Both Saudi Arabia and Russia are members of OPEC+, a group of oil-producing nations that pledged earlier this year to prop up oil prices by curbing supply. Saudi Arabia started cutting in July as it tries to fund an economic overhaul. Meanwhile, Russia’s seeking $$ to fund its war on Ukraine. The US and UK banned Russian oil and gas imports, while the EU has been reducing its reliance on Russia. To make up for it, Russia has been selling discounted gas to China and India, which now depends on Russia as its No. 1 source of crude. But demand from China (fossil fuel’s biggest customer) has weakened as its economy struggles.
The soft landing could get bumpy… Inflation has been steadily cooling, raising hopes for an end to rate hikes and no recession. But since oil prices affect so many industries (think: shipping your Amazon order of TP), some worry rising prices will stoke inflation — and not just at the pump.