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Data: FactSet; Chart: Axios Visuals

Oil and gas prices jumped on Thursday after the Organization of the Petroleum Exporting Countries (OPEC) and allied producers said on Thursday that they would extend production cuts into April.

The big picture: Oil is being driven by the production cuts of OPEC, a consortium of the world's largest producers, and expectations for a rebound in global demand as more countries emerge from coronavirus lockdowns.

  • Crude oil has been a top performing asset this year, with variants like gasoline and diesel also delivering big gains in 2021 of 38.6% and 24.3%, respectively.

The intrigue: OPEC has taken an incredulous approach to the massive rebound, suggesting prices could rise even more meaningfully in the coming months.

  • Saudi Energy Minister Abdulaziz Bin Salman told journalists at a virtual press conference Thursday that the "jury is still out" on the future of the oil market.
  • “At the risk of sounding like a stuck record, I would once again urge caution and vigilance."
  • “Before we take our next step forward, let us be certain the glimmer we see ahead is not the headlight of an oncoming express train.”

What's next: Gas prices in the U.S. already have risen to a one-year high and experts had predicted they could continue rising higher even before the unexpected extension of production cuts by OPEC.

  • In addition to the price drivers see at the pump, this could have implications for the cost of air travel and the price of imported goods, which were already seeing increases thanks to global supply chain disruptions and increased inflation expectations.

Go deeper

Why gas prices are back up

Data: EIA and FactSet; Chart: Axios Visuals

Gas prices are hitting new post-pandemic highs across the country, but this isn't a story of America reopening. It's really just a function of the price of oil going up.

By the numbers: Gasoline cost $2.71 on average as of Monday, per the Energy Information Administration. The highest average price was $3.59 in Los Angeles, while the lowest was $2.33 in Houston.

  • All of these prices represent the highest level seen since 2019.

The big picture: The price of crude oil reflects more than half of the cost of a gallon of gasoline. (The rest is refinery costs, distribution costs, and taxes.)

  • Demand for oil has actually been declining, per the New York Fed, but supply has been falling even faster, with the result that prices have now topped $64 for a barrel of Brent crude.
Felix Salmon, author of Capital
Mar 3, 2021 - Economy & Business

Why gas prices are back up

Data: EIA and FactSet; Chart: Axios Visuals

Gas prices are hitting new post-pandemic highs across the country, but this isn't a story of America reopening. It's really just a function of the price of oil going up.

  • By the numbers: Gasoline cost $2.71 on average as of Monday, per the EIA. The highest average price was $3.59 in Los Angeles, while the lowest was $2.33 in Houston.
  • All of these prices represent the highest level seen since 2019.

The big picture: The price of crude oil reflects more than half of the cost of a gallon of gasoline. (The rest is refinery costs, distribution costs, and taxes.)

  • Demand for oil has actually been declining, per the New York Fed, but supply has been falling even faster, with the result that prices have now topped $64 for a barrel of Brent crude.
Dion Rabouin, author of Markets
Mar 3, 2021 - Economy & Business

The Fed could be firing up economic stimulus in disguise

Federal Reserve governor Lael Brainard at a "Fed Listens" event. Photo: Eric Baradat / AFP via Getty Images.

Even as global growth expectations increase and governments pile on fiscal spending measures central bankers are quietly restarting recession-era bond-buying programs.

Driving the news: Comments Tuesday from Fed governor Lael Brainard suggest the Fed may be jumping onboard the global monetary policy rethink and restarting a program used following the 2008 global financial crisis.