Oil prices are hovering around $75 a barrel, which means gasoline prices are up across the U.S. as well, just in time for summer driving season. The oil market could see further movement this week as OPEC and its allies are set to meet on Thursday via videoconference.
OPEC has been meeting more frequently since last year as the global pandemic wreaked havoc on oil demand. That way, the group could be ready to shift production quickly as needed when economies came back online, said Sara Vakhshouri, president of SVB Energy.
“I would say the key word is predictability,” she said. “They tried to create a predictable market by giving a schedule until 2022 of how OPEC is going to increase its production.”
OPEC is already predicting that there won’t be enough oil to meet demand in August. That could lead to even more production in places like Saudi Arabia and Russia.
But Ellen R. Wald at the Atlantic Council’s Global Energy Center said oil prices are up because of what’s going on in the U.S.
“The really big story, I think, about what’s helping keep prices rising is that American production hasn’t come back to the same levels that it was in 2020,” Wald said.
Shareholders are demanding a return on investment, Wald said, which has led U.S. producers to reduce spending and keep output flat.