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Data: FactSet; Chart: Axios Visuals
Oil prices are moving up — they surged 17% in July, and analysts are now seriously talking about $100 oil again.
Why it matters: It’s a sign the market is feeling more optimistic about the economy — with recession fears abating.
- It also means more upward pressure at the pump, and on inflation more generally: A little summer agita for U.S. Federal Reserve Chair Jerome Powell.
Zoom in: The dynamics are simple. Oil prices are rising because demand forecasts are growing, thanks to the improving economic outlook — while supply is shrinking.
- Saudi Arabia and Russia have both recently cut back on production.
- Analysts at Société Générale and Standard Chartered forecast that the commodity will touch $100 next year, the Wall Street Journal reports.
Go deeper: The heat wave is driving up gas prices
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