Oil prices hit three-year high of $80 per barrel

The Brent crude oil price hit $80 per barrel on Tuesday for the first time in nearly three years as demand for fuel continues to outpace supply globally.

Crude prices have risen 55% this year despite the brief disruption in demand corresponding to the coronavirus's delta variant surge, and forecasts are for even higher prices.

Goldman Sachs said Tuesday that per-barrel prices could hit $90 this year, while Bank of America said that number could hit $100 over the winter, Bloomberg reported.

The $80 price point shows that with respect to oil demand, "the balance has changed dramatically" since the start of the pandemic, said Louise Dickson, a senior oil markets analyst at Rystad Energy. The dynamic has shifted from "global demand destruction and negative prices to supply tightness as demand returns," she added.

The price jump comes at a moment of significant concern among Republicans and some Democrats over increasing inflation across the economy.

That concern is shaping the debate over the Democrats' reconciliation package, with centrist Sens. Kyrsten Sinema of Arizona and Joe Manchin of West Virginia expressing they are worried that the party's top-line $3.5 trillion number for the measure will cause prices to rise more.

OIL SUPPLY LOSSES FROM HURRICANE IDA REACH 30 MILLION BARRELS, IMPACTING GAS PRICES

Republicans have used the risk of higher inflation for their own purposes in arguing against the bill while also blaming the Biden administration for price spikes themselves.

The party blamed the administration's ambitious climate agenda for increased oil and gas prices domestically, including President Joe Biden's decision ordering a pause on new oil and gas leases on federal lands earlier in the year, but officials have pushed back, saying output levels have remained the same.

"The production has stayed at levels consistent with past administrations. The pause did not impact ongoing permitting on legally held leases so that has continued, and the jobs associated with that have continued," Laura Daniel-Davis, principal deputy assistant secretary for land and mineral management at the Interior Department, said during a hearing last week.

In response to the heightened prices, a White House official told the Washington Examiner that the administration is employing "every tool at our disposal to address anti-competitive practices in U.S. and global energy markets to ensure reliable and stable energy markets."

CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER

One of those tools has been urging OPEC to boost global supply to meet demand. The Biden administration made that request to OPEC in August, with the White House saying at the time that its output was "simply not enough" during a "critical moment" in the global economic recovery.

The official also cited a letter National Economic Council Director Brian Deese sent to the Federal Trade Commission in August asking the agency to use "all of its available tools to monitor the U.S. gasoline market and address any illegal conduct that might be contributing to price increases for consumers at the pump," to which the FTC committed.

Original Location: Oil prices hit three-year high of $80 per barrel

Washington Examiner Videos