Oil prices briefly touched $93 a barrel on Friday, as freezing weather in Texas raised the risk of short-term supply disruptions.
Driving the news: Some producers in Texas' oil-rich Permian Basin cut production on Thursday due to freezing conditions, S&P Global Platts reported.
- The production cuts may have triggered unpleasant flashbacks to last February's massive Texas freeze — which hobbled the energy industry and led to a massive, though momentary, price surge — though few expected this storm to be that bad.
Why it matters: Climbing energy costs can act as a tax on consumption, cutting into the cash available for Americans to spend elsewhere and potentially undercutting the economic recovery.
Yes, but: Wage growth, and low-interest rates — which have made monthly interest payments on car loans and mortgages more affordable over the last couple of years — means workers are relatively flush and can afford to pay a bit more at the pump.
The bottom line: Even if they don't burden the economy or households too much, higher energy prices will be an irritation to Americans, already driven to distraction by two years of pandemic living.
- That'll add to the growing gap between the strong economy and the downright sour public mood that's coming through loud and clear in opinion polling.