Global energy prices are set to rise even higher this summer as countries scramble to secure oil and natural gas.

The Biden administration has dipped into the US Strategic Petroleum Reserve, which has stabilized gas prices but not lowered them. The US Energy Information Administration (EIA) expects Brent crude oil will average $110 per barrel in the third quarter and $105 per barrel in the fourth. This is higher than forecasts made a month ago but lower than the actual cost per barrel a month ago.

The good news is that gas prices are declining, with the EIA forecasting prices will average $3.87 per gallon by the end of the year. The problem, the EIA said, is that oil and gasoline inventories are low. The agency also noted that refinery production is relatively low compared with pre-Covid levels. The EIA said its forecast incorporates the assumption that the European Union will follow through on its plan to ban seaborne crude oil and petroleum product imports from Russia. However, the forecast does not include potential restrictions on shipping insurance because details are not known.

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