Brent crude oil traded at $103.98 a barrel by 8 a.m. Eastern Time, down $4.36, or 4.02%, from $108.34 a day earlier, according to the price figures cited in the report. The same figures put the benchmark 15.32% above $90.16 a month earlier and 52.64% above $68.12 a year earlier, a gap of about $36.
Brent crude trades at $103.98 a barrel, down $4.36 from a day earlier
Brent crude oil traded at $103.98 a barrel by 8 a.m. Eastern Time, down $4.36, or 4.02%, from $108.34 a day earlier, according to the price figures cited in the report. The same figures put the benchmark 15.32% above $90.16 a month earlier and 52.64% above $68.12 a year earlier, a gap of about $36.
Crude oil usually accounts for more than half the price of a gallon of gasoline, and the report says sharp increases in oil almost always show up quickly at the pump, while declines translate into slower, delayed drops in gasoline prices, an effect it calls the "rockets and feathers" effect. The price per gallon also bundles refinery, wholesaler, government tax and gas-station markup costs, it says.
The U.S. Strategic Petroleum Reserve holds crude oil for emergencies including sanctions, severe storm damage or war, and can take the edge off price spikes when supply is hit, according to the report. It is described as an immediate safety net to support consumers and keep sectors such as key industries, emergency services and public transportation running, and not a long-term solution.
The oil market tracks two benchmarks, according to the report: Brent crude, described as the main global benchmark, and West Texas Intermediate, the main benchmark of North America. Brent is described as offering a clearer view of global oil performance because it prices much of the world's traded crude, and the U.S. Energy Information Administration now uses Brent as its primary reference in its Annual Energy Outlook.
The report recounts past swings in oil, including the early 1970s first major oil shock, when the Middle East slashed exports and placed an embargo on the U.S. and others during the Yom Kippur War; declines in the mid-1980s tied in part to lower demand and the entry of more non-OPEC producers; a jump in 2008 on increased global demand followed by a plunge alongside the global financial crisis; and a collapse in demand during the 2020 COVID lockdown that brought prices below $20 a barrel.
Oil and natural gas are linked, the report says: if oil prices increase, some industries may substitute natural gas in some areas of their operations where possible, which can increase demand for natural gas.
The report says oil prices depend largely on supply and demand, including news about potential future supply and demand such as geopolitics and decisions by OPEC+. In the U.S., it says, prices also move based on how friendly an administration is to drilling, and it cites 2025, when the Trump administration moved to reopen more than 1.5 million acres in the Coastal Plain of the Arctic National Wildlife Refuge for oil and gas leasing, reversing the Biden administration's policy of limiting oil drilling in the Arctic.
Oil prices are inherently unpredictable, the report says, and can swing suddenly in times of heightened concern about recession, war or other major disruptions. It says the price updates constantly while futures markets are open, describing a futures market as an auction in which people agree to buy or sell oil in the future. It adds that greater U.S. access to shale, described as rock containing oil and natural gas, means more supply and less spiking, and that expensive oil tends to raise the cost of everyday items through energy and logistics such as shipping.
- The source does not state the calendar date on which the $103.98 price was recorded, giving only "today" and 8 a.m. Eastern Time.
- The source does not state what drove the $4.36 one-day decline in Brent crude.
- The source does not give current U.S. gasoline pump prices or how many cents per gallon the oil move represents.
- The source does not state the current volume of oil held in the Strategic Petroleum Reserve.
- The source does not state whether the $103.98 figure is a settlement price or an intraday quote.
- The source does not identify the data provider behind the quoted price figures.