Oil Price Hike! Fuel to Get More Expensive in the US?
Companies say impacts from the COVID-19 pandemic and high natural gas and coal prices are the reasons for the high prices of fuel this week.
Mobil Oil Marianas took the lead, raising its prices early Friday morning, just two weeks after its last increase. Shell Marianas followed suit, raising its prices by 10 cents late Friday.
Mobil raised its prices from $ 4.92 a gallon of its Extra fuel to $5.02. Mobil also raised its Supreme fuel from $5.37 to $5.47 while its diesel also went up from $5.18 to $5.33.
As the cost of coal and natural gas continues to rise, industries are now switching to other crude oil derivatives as a source of power. Colder temperatures in the upcoming winter could also increase demand for heating oil and create more supply deficits.
Japan’s Prime Minister Fumio Kishida has said that his country would pressure oil producers to raise output. It is also possible that the US may do the same if crude oil price approaches $90 per barrel.
Brent crude oil futures were up 93 cents, or 1.1%, to $85.79 a barrel by 1100 GMT, after hitting $86.04, their highest level since October 2018. US West Texas Intermediate (WTI) crude futures climbed $1.35, or 1.6%, to $83.63 a barrel, after hitting $83.73, their highest since October 2014.
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Both contracts rose by at least 3% last week.
On the other hand, Chinese data showed third-quarter economic growth fell to its lowest level in a year hurt by power shortages, supply bottlenecks, and sporadic Covid-19 outbreaks.
China’s daily crude processing rate in September also fell to its lowest level since May 2020 as a feedstock shortage and environmental inspections crippled operations at refineries, while independent refiners faced tightening crude import quotas.
On the supply side, US oil drillers, taking advantage of rising prices, put more oil rigs into production for a sixth consecutive week.
The number of US oil rigs, an indicator of short-term production in the country, increased by 12 to 445 for the week ending Oct. 15, oilfield services company Baker Hughes said on Friday.
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