Oil nears $94 a barrel, in biggest daily jump since May
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The price of U.S. crude oil on Wednesday posted its biggest daily jump since May, and climbed to its highest level so far this year.
Why it matters: The rise in oil prices, along with a recent upswing in housing prices, adds to the recent run of numbers that suggests a resurgence in inflation pressures.
Driving the news: Fresh data showed lower-than-expected crude oil stockpiles, especially at the key storage hub in Cushing, Okla., where deliveries for U.S. futures contracts occur.
- Benchmark U.S. West Texas Intermediate crude oil futures rose 3.6% to $93.68 a barrel.
- Prices are up more than 10% this month.
Context: One reason prices are up is that the U.S. economy has been stronger than expected over the last year, consuming more oil than forecast.
- Also, global supplies are tight, as major producers Saudi Arabia and Russia have struck deals to reduce their production and prop prices up.
- And U.S. producers haven't unleashed a gusher of new production in response. Instead, they are increasing production in a slow and steady fashion that helps keep prices firm.
💠Matt's thought bubble: The rise in oil prices — and by extension gasoline prices — along with the recent downturn in stock market performance is a perfect recipe for sour consumer sentiment, and peril for incumbent politicians.
