For the first time in over three years, US Oil prices hit $70 a barrel on Sunday. While prices have subsequently dropped down a little from that high point — West Texas Intermediate was last trading at $69.30 a barrel — it still highlights the significant recovery in energy prices since Oil fell below zero for the first time in April 2020.
The $70 milestone is $110 a barrel higher than the previous low. The last time the benchmark Oil contract in the United States traded above $70 was in October of last year. The resurgence has been fueled by a rebound in demand for gasoline and jet fuel as the pandemic fades and the economy picks up speed.Jeffrey Halley, the senior market analyst for the Asia Pacific at Oanda, said, “An improvement in India Covid-19 case numbers and the ongoing recovery in the US and Europe ahead of their summer is supporting prices. OPEC+ is content to postpone tinkering with their production targets for now.”
As the pandemic fades and the economy picks up speed, the revival has been propelled by a comeback in demand for gasoline and jet fuel. OPEC and Russia are restricting supplies as well, though they plan to boost supply in the coming months.
OPEC and Russia are also limiting supplies, though they intend to increase output in the coming months. Meanwhile, gas prices in the United States continue to rise. On Sunday, the average gallon of regular gas cost $3.05, up from $2.02 a year ago. Brent crude futures have also climbed sharply in recent months. The global benchmark last traded at $71.49, its highest level since May of this year.