U.S. Crude Reaches Highest Price of 2023
New York, NY, August 10, 2023-"Three major factors are shaping the oil market in 2023. Two of them helped push U.S. crude on Wednesday to its highest price of the year,” according to the Wall Street Journal.
“Saudi and Russian production cuts, coupled with the resilience of the fuel-guzzling American economy, have tightened the market from both sides. Those pressures on supply and demand have propelled a weekslong rally in prices despite a deepening malaise in China.
“Benchmark U.S. crude on Wednesday climbed 1.8%, to $84.40, or almost 25% above its June 27 level. The closing value was West Texas Intermediate's highest since Nov. 16, according to Dow Jones Market Data.
“The new 2023 high, which came a day before fresh inflation data, underscores how rising energy prices are complicating Wall Street's bets that Washington can tame inflation without tipping the U.S. economy into recession.
“Oil's unusual rise this summer has driven up the cost of Americans' commutes, freight haulers’ trips, and the production of everything from plastics and fertilizers to clothing. The benchmark price for natural gas -key for power generation and manufacturing-has also jumped nearly 20% over the past week as workers at several Australian export platforms have threatened a strike.
“While the Federal Reserve doesn't include volatile energy in its chosen metrics for consumer price pressures, the hikes are adding new wrinkles to investors' inflation calculus. On Wall Street, many analysts expect oil to continue ticking upward.
"‘Despite continued concerns over the pace of Chinese growth, the outlook is improving, in our view,’ UBS told clients.”