The USA Government Backs Lower Crude Oil Prices Foreseeing Ripple Effects of Energy Crisis
- 19-Oct-2021 12:39 PM
- Journalist: Nicholas Seifield
The USA government is in talks with the oil and gas industry to lower down the persistently increasing fuel costs responsible for sending shockwaves across the country. According to the ChemAnalyst database, the crude oil prices in the USA reached USD 80.87 per barrel, a 7-year high value at the closing of the second week of October, registering a hike of 12% from the price values in the second week of September.
The inflation in crude oil and natural gas prices in the country is being viewed as the repercussion of acute shortage of energy and alarmingly high prices of the energy fuels in major economies like Europe, China, and India. In the wake of the ripple effect from the ongoing energy crunch across the world and with an expected surge in winter fuel demands, the country fears the domestic fuel costs to break records if not tamed on time.
The oil production in the USA has not been able to rebound since the COVID19 pandemic hit the country in 2020 and back in 2021. A further blow in the form of landfall by the hurricane Ida in August 2021 crippled the oil and gas sector in the USA by disrupting operations at three-quarters of oil production facilities located at the Gulf of Mexico, that are responsible for generating 1.4 million barrels of oil per day. The slowly recovering production has now fallen prey to the ripple effects from the spiralling fuel costs across the globe.
As per ChemAnalyst, the global natural gas and the crude oil market is witnessing dramatic supply-demand discords with major economies running short of energy supplies that have hampered several businesses. The supply-demand tension is not expected to ease out soon and the country may soon have to cope with higher household expenditures which can possibly tarnish the country’s economic growth. A point to ponder is whether the government’s cognizance and its efforts to cap the rising fuel prices will play an important role in stabilizing the domestic energy market when the odds seem against the government’s intent.