“The story has been one of a strong stock market, a weaker dollar and continuing geopolitical events,” said Adam Sieminski, head of the federal Energy Information Administration.
He said political strife in Syria, Yemen and Sudan cut off some supplies while the latest price surge was “driven by central bank moves in both the U.S. and Europe” and by “optimism about the economy, which changes expectations about what demand will be going over the course of the next six to 12 months.”
The price for the West Texas Intermediate grade of crude oil for October delivery briefly rose above $100 a barrel on Friday before closing at $99, up 69 cents. The widely used European benchmark Brent crude closed at $116.66 a barrel, up 78 cents.
Since late June, the price of crude oil has climbed about 25 percent, fueling a 16-cent increase in the average price of regular gasoline and adding to the economic headwinds facing President Obama in the final weeks of the election campaign.
The consumer price index increased 0.6 percent in August on a seasonally adjusted basis, the Bureau of Labor Statistics reported Friday. It was the largest increase since June 2009. About 80 percent of the increase was due to the surge in gasoline prices, the Labor Department said.
Several analysts said Obama probably would order a release of oil from the 700 million-barrel Strategic Petroleum Reserve, as he did during last year’s civil war in Libya, and that he would cite the success of sanctions against Iran. A White House official, speaking on the condition of anonymity, said “all options remain on the table, but we have nothing to announce at this time.”
Oil analysts said that in order to have more than a fleeting impact when tapping the Strategic Petroleum Reserve, Obama might need to make his intervention more open-ended, in a fashion similar to Thursday’s pledge by the Federal Reserve to continue its intervention until it gets results. During the Libya crisis, Obama released 30 million barrels to dampen prices.
The high prices have continued despite large increases in supplies from the United States, especially from North Dakota.
“People tend to conflate or confuse what’s going on in the United States with with rest of the world. Supply is bursting. Demand is flat or declining. And inventories, especially of crude oil, are full,” said Robert McNally, founder and president of the Rapidan Group, a consulting firm. But in the outside world, “the market is tight as a drum.”