Oil Prices Rise Above $80

By Nate Griffin – November 18th, 2021

This week, Oil Prices rose above $80 per barrel, a level not seen since December of 2019, according to the Energy Information Agency (EIA). While these prices are elevated from what we have seen in the past year, they are still lower than peak oil prices seen in the late 2000s.

Nationally, prices at the pump have risen to about $3.40.

The price increases are largely driven by a rise in consumption that has outpaced the rise in production.

During the worst of the COVID-19 recession, low demand for oil cause prices to crash, even going into negative territory for a brief period. Those low oil prices caused producers to sharply reduce their oil production.

Since then, global oil consumption has exceeded production and OPEC inventories have fallen by 424 million barrels (13 percent).

According to the Bureau of Labor Statistics, energy prices are currently the largest single contributor to inflation and are a top concern for many Americans.

The EIA predicts that production will soon catch up with consumption and that inventories will begin to rise again by 2022. The forecasted average price for 2022 is $72 per barrel.