Despite a record release of oil reserves and a temporary pause on Russian energy sanctions, oil prices have continued to rise – raising fears that energy shocks could ripple across consumer prices and lead to a toxic mix of inflation and slow growth known as “stagflation.”
The International Energy Agency last week announced a historic release of 400 million barrels of oil reserves. The US said it would release 172 million barrels from its Strategic Petroleum Reserve.
Though Energy Secretary Chris Wright previously said gas would soon be back below $3 a gallon, he appeared to backpedal over the weekend.
“There’s no guarantees in wars at all,” Wright told ABC News on Sunday. “I can guarantee the situation would be dramatically worse without this military operation to defang the Iranian regime.”
As oil prices have skyrocketed over the past few weeks, small investors have poured money into exchange-traded funds with oil ties – with some analysts comparing the trend to meme stock frenzies like GameStop.
Net retail buying of oil ETFs jumped to a record $211 million last Thursday – above the previous record high during the pandemic-era swings in May 2020, according to Vanda Research.
