Oil Prices Surge To 18-Month High Amid Global Supply Concerns

Oil Prices Surge To 18-Month High Amid Global Supply Concerns...

Oil prices jumped to their highest level since September 2024 on Monday, with Brent crude surpassing $95 per barrel as geopolitical tensions and production cuts tighten global supplies. The spike comes as OPEC+ extends voluntary output reductions and Houthi attacks on Red Sea shipping routes disrupt Middle Eastern exports.

West Texas Intermediate (WTI), the US benchmark, climbed 3.2% to $91.78 per barrel in early trading—marking the steepest single-day gain this year. Analysts attribute the surge to renewed concerns over Russian refinery outages and China's stronger-than-expected February manufacturing data, signaling robust fuel demand.

The price rally is hitting American drivers just as the spring travel season begins. AAA reports the national average for regular gasoline rose to $3.68 per gallon this week, up 12 cents from February. Energy Secretary Jennifer Granholm told CNBC the administration is "monitoring the situation closely" but ruled out immediate Strategic Petroleum Reserve releases.

Market volatility intensified after Ukraine escalated drone strikes on Russian oil infrastructure over the weekend, damaging at least three major refineries. Simultaneously, Saudi Arabia announced it would maintain its 1 million barrel-per-day production cut through at least June, defying US pressure to increase output.

Energy analysts warn prices could test $100 if disruptions continue. "We're seeing a perfect storm of constrained supply and resilient demand," said RBC Capital's Helima Croft. The White House faces mounting political pressure as Republicans blame Biden administration policies for limiting domestic production.

The surge comes ahead of Wednesday's critical OPEC+ meeting, where members will decide whether to maintain current production levels. Traders are also watching US inventory data due Tuesday for signs of tightening supplies ahead of summer driving season.