There's good and bad news in the fact oil prices in the United States spiked to above $90 a barrel for the first time in over seven years. Pain at the pump and in your energy bills mean a sector of the economy that took a big hit during the pandemic is thriving again.
Crude oil jumped over 2% to as high as $90.23 a barrel on Thursday. The last time prices were above $90 a barrel was in October 2014.
The U.S. oil benchmark is based off of West Texas Intermediate crude, which are up nearly 20% already this year.
Last week, the world benchmark Brent crude rose above $90 a barrel. It was also the first time that had happened since October 2014.
The price of oil was $65.57 a barrel on Dec. 1, 2021, but has since grown by 37%.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, the group known as OPEC+, said on Wednesday that it will continue with their previously announced plan to increase production by 400,000 barrels a day in March.
Wall Street analysts are now predicting that oil prices could reach $100 a barrel.
“The oil market is so tight that any shock to production is going to send prices soaring. OPEC+ production is on cruise control with their gradual increase strategy, which means oil seems like it’s going to make a run towards $100 oil pretty soon," Oanda Cooperation's Ed Moya said.
Moya isn't alone with the forecast of $100 oil, as Louise Dickson, senior oil markets analyst at Rystad Energy, reinforced what he said.
"The market remains bullish on oil prices, as it has since May 2020 when OPEC+ enacted mega cuts to its output bringing oil from negative territory to a quite reasonable jump away from $100 per barrel," Dickson said.
“The prevailing expectation is that the market, despite some downward blips caused by pandemic demand scares, will continue to trade high on oil as real supply shortages exist both in the short and long-term view," Dickson added.
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