New York (CNN Business)Oil prices on Tuesday climbed to their highest level in nearly seven years after OPEC and its allies declined to significantly ramp up production.
US crude jumped another 2% to $79.22 a barrel, a level unseen since November 10, 2014. The 63% spike in oil prices so far this year is amplifying inflationary pressures weighing on the world economy.
Prices at the pump remain elevated. The national average for a gallon of regular gas rose to $3.20 on Tuesday, up from $2.19 a year ago, according to AAA.
The latest oil rally comes a day after OPEC+ announced it was sticking to a plan to boost production just modestly despite lofty energy prices. The Saudi Arabia-led group reiterated it will increase output by 400,000 barrels per day for the month of November.
The OPEC decision “drove traders into a buying frenzy” because it “guarantees a tight supply picture in November and December,” Rystad Energy senior oil markets analyst Louise Dickson wrote in a note Tuesday.
For months, White House officials have been calling for OPEC+ to accelerate the return of production that was sidelined during the onset of the pandemic. The Biden administration has voiced concern that high energy prices could slow the economic recovery.
“We’re going to continue to use every tool at our disposal, even as we’re not a member of OPEC, to ensure we can keep gas prices down for the American public,” White House press secretary Jen Psaki said Monday after the OPEC+ meeting.
Psaki pointed to a series of actions taken by the Biden administration, including working to revive energy facilities knocked offline by Hurricane Ida, releasing barrels from the Strategic Petroleum Reserve and the Federal Trade Commission monitoring the gasoline market.
Psaki also noted the White House urged a compromise solution that was reached earlier this year at OPEC, allowing for a boost to production.
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