The global oil market continues to mirror the stock market---an unpredictable roller coaster ride. After surging to an all-time record high of over $120 dollars a barrel a few weeks ago, recent days says a plunge in crude prices, briefly falling back below the $100 level before closing Monday around $103. Last week's sudden drop was driven by fears of an impending global recession, which would drive down demand significantly. But analysts believe the trend is only temporary. "We think that any demand slowdown we're seeing because of recession might be offset by the fact that China's going to reopen their economy (from COVID lockdowns)," says Phil Flynn, oil market analyst with the Price Futures Group. "So that would project that prices will start edging up as we get later in the summer."
The other big international factor weighing on the oil markets is the Russian war in Ukraine, which has put added strain on the global supply. "With Russia cutting off gas supply and Europe being forced to use more oil to stay warm this winter, that's going to keep that market tight," says Flynn. "So again, those prices are probably going to edge up."
The U.S. could do more here at home to counter all of these international pressures, but that doesn't seem to be an option for President Biden, who has attacked domestic energy producers while asking OPEC to increase its output. "This is part of (Biden's) energy policy, to get off of fossil fuels," Flynn tells KTRH. "Well, getting off fossil fuels means you make them rarer and more expensive...and that is exactly what we're seeing."
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