Oil Prices Climb to 10-month High after Libya Floods

Oil prices hit over $92 a barrel on Tuesday, marking the first time in almost 10 months, as concerns grew over potential supply issues due to severe flooding in Libya.

Brent crude, a global measure, rose about 2%, reaching $92.38 a barrel – the steepest since November 17, 2022. In the U.S., oil prices increased by 2.3%, touching $89.29 a barrel, matching the previous high from November.

This rise in oil prices suggests consumers might see a bump in gas prices, which could add to the ongoing inflation concerns in the U.S. market. Experts believe the price hike is due to the recent flooding in Libya, impacting the nation's oil exports. In August, OPEC reported that Libya produced around 1 million barrels of oil each day.

This situation in Libya follows last week's news from Russia and Saudi Arabia. Both countries had earlier raised oil prices by deciding to keep their supply cuts going. Consequently, gas prices have slightly increased this week.

As of Tuesday, the average price for regular gas reached $3.84 a gallon, up from $3.81 from the prior week, according to the AAA. This rate is 12 cents more than what it was a year ago.

Government forecasters are warning that prices are unlikely to cool off much in the coming months. If these predictions hold true, energy prices will continue to complicate central bankers’ efforts to tame inflation.

Economists expect that Wednesday’s Consumer Price Index inflation report will show consumer price gains accelerated in August, in large part because of the late summer jump in gas prices.