Oct 29, 2021 - Economy

Oil rally pulls back … for now

Data: FactSet; Chart: Axios Visuals

If you saw the news that oil prices pulled back this week, don’t get too excited for your pocketbook just yet.

Driving the news: U.S. crude may have receded a few bucks from its seven-year record high — but global energy demand still signals that there’s room for this year’s upward march to resume.

Why it matters: Surging energy prices are a crucial part of inflation, and we’re heading into winter with all the heating needs that season brings.

What's new: The American Petroleum Institute said this week that U.S. crude inventories had grown, Louise Dickson, senior oil markets analyst at Rystad Energy, wrote in a research note.

  • That sent U.S. crude down from its Tuesday peak of nearly $85 per barrel.
  • The extra stockpile takes some of the edge off the supply-and-demand imbalance that has sent prices soaring this year.

Yes, but: More broadly, oil demand continues to outpace supply — and prices could still hit $100 per barrel by the end of the year, Dickson said.

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