Domestic oil supplies are dropping which most likely will increase the price of oil. The only way to lower the price of oil is lower the demand or increase the supply, else prices will adjust to where the demand matches the supply.
American stockpiles of crude oil at the key hub in Cushing, Oklahoma, fell to the lowest level since 2014, as domestic oil markets remain tight, Matt writes.
Why it matters: Skimpy energy supplies have driven oil and gasoline prices sharply higher this year and contributed to our stubborn inflation.
Supplies at the oil storage center in Cushing are closely watched because it’s where physical deliveries of benchmark futures contracts for West Texas Intermediate crude occur.
State of play: The shortage stems from sanctions on Russia’s energy production, while U.S. drillers haven’t boosted supplies dramatically
The oil industry and Republican politicians argue that moves by the Biden administration — like blocking the Keystone XL pipeline on environmental grounds — deter investments in future production.
The bottom line: With oil demand above supply, high prices are likely to be with us for a while — or at least until a weakening economy softens demand.Axios Markets By Emily Peck and Matt Phillips · Jun 30, 2022