By Alice Seeley
U.S. oil prices soared above $100 a barrel on July 18 following President Joe Biden’s visit to Saudi Arabia. Brent crude, the international benchmark, climbed 5% to $106.27, while West Texas Intermediate, the US benchmark, also jumped 5% to $102.60 a barrel.
During his visit, President Biden failed to convince the leader of Saudi Arabia, Crown Prince Mohammed Bin Salman, to increase oil production in order to help bring down sky-high energy prices. After the visit, the Saudi Foreign Minister Prince Faisal bin Farhan Al Saud reported that President Biden did not bring up the topic of OPEC+ boosting oil supply during the summit meeting with Arab leaders. In addition, Iraqi Oil Minister, Ihsan Abdul Jabbar predicted oil will continue trading above $100 for the remainder of 2022.
The jump in price is “largely driven by a weaker US Dollar and higher equity markets,” said Dennis Kissler, senior vice president of trading at BOK Financial. “Saudi Arabia gave no signs of immediate production increases coming, which sums up to last week’s selloff probably being over-exaggerated.”
Analysts at ING were not surprised at this price increase, stating “WTI and Brent crude oil futures trade higher after President Biden, as expected, left the Middle East with no promise of additional barrels to help suppress record high US gasoline prices.”
President Biden had high hopes that the Saudis shared his “urgency” to increase supply and he expected the kingdom to take “further steps in the coming weeks” to achieve that goal.
