Oil and gas prices on the rise again
Oil prices touched their highest levels in years Tuesday, a day after OPEC, Russia and their allies failed yet again to reach agreement on production increases. A teleconference planned for Monday never started, following meetings Thursday and Friday that did not reach a deal.
West Texas Intermediate, the U.S. bench mark, rose as high as $76.98 a barrel earlier in the day, its highest in more than six years, before retreating.
The volatility reflected worry that the deadlock in OPEC Plus, the alliance of oil producers, means that too little oil would reach the markets at a time of growing consumption as the effects of the pandemic ease and summer travel booms.
The United Arab Emirates, which has invested in its oil capacity in recent years, is insisting on higher levels of production over objections from Saudi Arabia, a longtime ally, and other producers. Mediation efforts have so far not bridged the gap, and a new meeting has not been scheduled. The disarray in OPEC Plus raises the risk of a price war among producers, like the one in the spring of 2020, but some analysts think the group is more likely to figure out a way of gradually drip-feeding more oil into the market in the coming months, a move that would soften price jumps.
Also Monday, the website GasBuddy.com reported that gas prices in Chattanooga have risen 1.8 cents per gallon in the past week, averaging $2.84 a gallon today, according to the website’s daily survey of 170 stations in Chattanooga. Gas prices in Chattanooga are 5.4 cents per gallon higher than a month ago and stand 92.4 cents per gallon higher than a year ago.
Gas prices in Chattanooga average 28 cents per gallon below the U.S. average.
“Gasoline demand over the holiday weekend certainly did not disappoint as millions of Americans flooded the roads for the long weekend, guzzling down gasoline at a clip not seen in years, and in the process, we could have set new all-time records for consumption,” said Patrick De Haan, head of petroleum analysis for GasBuddy. “For now, with imbalances in supply and demand continuing, motorists will continue digging deeper to pay for gasoline as prices are likely headed nowhere but up until global supply starts to catch up with the continued surge in demand.”
Alabama power coop hit by ransomware
A utility that provides power in rural southeastern Alabama was hit by a ransomware attack that meant customers temporarily can’t access their account information, but an executive said Tuesday that systems were beginning to be brought back online.
Wiregrass Electric Cooperative, which serves about 25,000 members, did not pay a ransom and didn’t have any data compromised in the attack, chief operating officer Brad Kimbro said. Electrical service wasn’t interrupted.
But member account information and payment systems were taken offline for maintenance and as a precaution, he said, and information technicians were starting work to reestablish customer sites.
“Our IT guys spent all weekend out of an abundance of caution looking at every server, every laptop, every computer, everything,” Kimbro said.
Customers could continue having intermittent problems because of issues like broken links to websites, he said. The utility said it won’t disconnect service for customers with prepaid accounts during the interruption, the Dothan Eagle reported.
Ransomware attacks are launched by hackers who gain access to a computer system and then demand payments. While thousands of organizations were infected in at least 17 countries in a widespread assault that began Friday through software produced by Kaseya, Kimbro said the utility dropped the company’s products about 18 months ago.
Services sector growth slows during June
Growth in the services sector, where most Americans work, slowed in June following record expansion in May.
The Institute for Supply Management said Tuesday that its monthly survey of service industries retreated to a reading of 60.1, following an all-time high reading of 64 in May. Any reading above 50 indicates the sector is expanding.
It’s the 13th straight month of expansion in the services sector following a two-month contraction in April and May of last year as businesses were forced to shut down during the early stages of the coronavirus pandemic.
After five consecutive months of expansion, the employment index fell into contraction territory in June with a reading of 49.3, down from May’s 55.3, suggesting many companies are still struggling to hire enough workers.
The Labor Department reported an encouraging burst of hiring in its jobs report last week, 850,000 jobs added in June, well above the average of the previous three months. Hiring in June was particularly strong in restaurants, bars and hotels, which collectively absorbed heavier layoffs from the recession. Those businesses added 343,000 jobs, but it may not be enough.
Comments from respondents continued to focus on supply chain issues, supply shortages and staffing difficulties.
“Manpower has been a concern,” said one; another commented: “Lack of labor is killing us.”