An OPEC+ spat pushed oil prices higher. Will gas prices spike again, too?

OPEC Plus canceled a scheduled meeting Monday, dashing hopes for an agreement to increase production to satisfy the world’s growing demand for oil.

Oil prices climbed higher on the news. The price of Brent crude, the global benchmark which has has surged roughly 50% this year, rose another 1% to top $77 a barrel. No new date for a meeting was set after the announcement that that meeting was canceled.

The high drama came as Americans hit the road for the Fourth of July holiday  greeted by a seven-year high in gasoline prices, adding to inflation headaches already hitting the economy. The average price of a gallon of regular gas in the United States stands at $3.13, up 95 cents, or 44%, from a year ago.

US oil prices finished above $75 a barrel on Thursday for the first time in nearly three years, and are now trading near $75.50. It’s a remarkable recovery from April 2020 when crude crashed to negative $40 a barrel.

There are concerns that if an agreement cannot be reached, the alliance could break apart, potentially triggering a price war and swings in global oil prices at a time of uncertainty over future demand for oil due to continued lockdowns in parts of the world and the uneven distribution of vaccines worldwide.

The rebound has been driven in part by soaring demand for gasoline and jet fuel as the pandemic winds down and health restrictions ease.

Wall Street analysts have said that only OPEC Plus can come to the rescue by pumping more oil to meet surging demand.

Yet supply is being held back because of an agreement between OPEC and allies including Russia, a group that is referred to as OPEC Plus. The partners have only gradually added back production that it aggressively sidelined during last year’s oil crash.

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