According to oil historian Daniel Yergin, the US is likely to ask OPEC member states to pump more crude to help ease a surge in energy prices. The Biden administration doesn't have a lot of tools to deal with current elevated prices. In August, they called on Saudi Arabia and its allies to unload more crude onto global markets.
Crude futures, which have surged above $80 a barrel, could reach $90 as Europe and Asia are likely to use more of the fuel for power generation and heating, substituting for pricier natural gas.
Tight gas supplies have led to unprecedented price spikes amid escalating concerns about winter shortages. This added to inflation woes and imperiled the economic recovery from the pandemic. According to Yergin, while most power plants can't switch from gas to oil, dual-fired generators have some flexibility. "Though the Biden administration has pushed for a quicker transition to renewable energy, the crisis ravaging Europe and Asia could lead to a big "re-think" over the timing of cutting back on fossil fuels as available alternatives are still not ready to fully replace them," Yergin said. Still, he think the US probably won't have to ration demand for natural gas using measures such as power curtailments.
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