Oil prices peak as countries deplete their energy stores

Oil peaked at its highest price in years on Monday, and as coal and gas prices soar countries are resorting to switching off their power.

Scarcity of these commodities has been triggered by the fall in U.S. gas production last year as well as the covid-19 recession.

Market Strategist Daniel Weiner says that the shortage is triggered by “[countries] trying to cut down on coal” as well as the “PPP not creating sure access to a gas supplier that would stabilise prices”.

Coal supply shortages and looming emission targets in China have grounded many factories.

Meanwhile, in Europe, with gas and power prices steadily growing some governments have taken to combatting prices.

Spain cut taxes to lower gas bills in June but has since reverted the move, blaming lost revenue and the continuing gas price boom.

ANZ bank analysts predict the gradual easing of restrictions across the globe will help recover fuel consumption, along with the the construction of additional oil and natural gas rigs in the U.S.

White House Press Secretary says President Biden is reviewing options to address the energy crisis.

“Some of the issue here is the supply as a result of the pandemic, there’s a gas shortage around the world hence the need for the United States to continue to export natural gas,” she says.

Depleted energy and ongoing maintenance are some of the biggest contributors to the price surge.

While it may be a while before the world’s oil and gas stores recover, all eyes will be on the COP26 climate change conference to see if world leaders are planning to shift away from commodities like coal to greener energy.