Oil prices top $80 per barrel on latest inflation data

Oil (BZ=F, CL=F) prices rose above $80 per barrel on Thursday, the highest peak since late 2023. The increase comes as inflation expectations track crude oil prices, and as the International Energy Agency (IEA) forecasts a supply deficit for 2024.

Yahoo Finance's Jared Blikre joins the Live show to break down the latest developments.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Nicholas Jacobino

Video transcript

JULIE HYMAN: One of the biggest moves in the market today, oil prices topping $80 a barrel. Jared Blikre is in the newsroom with the details. It's been on a run.

JARED BLIKRE: It is. Oil WTI specifically above $80 a barrel is a big deal. And I'm going to show you why on the Wi-Fi interactive behind me. This is today's price action.

But I'm going to broaden this out to over the last three years. This, by the way, this spike here, that was the Russia invasion of Ukraine. This is Gaza-Israel here, a much smaller bump.

But you can see we're relatively low in this two or three-year trading range. And, in fact, $82 is more of a resistance level that I'm paying attention to. But if oil breaks above that, we have this high here in the low 90s.

And then $100, a big round target. The point is that oil is on the upswing here. You can also see that embedded in the Brent prices, a few dollars more.

$85 a barrel. All of this has to do. And it all ties back to inflation.

Now, we got the PPI that's producer price inflation number this morning. And they were a little bit hot. And let me show you the correlation between crude oil and inflation expectations.

Not this one here. It's going to be this one. This is something called break evens. It's a part of the bond market.

So you look at 10-year break evens which closely track inflation expectations. Those closely tracked crude oil prices. If we have crude oil heading higher, guess what? We probably have inflation expectations heading higher as well.

And we know what that means for the economy. And the Fed, you can do the calculations there. Just want to throw out one more thing.

We Have AI getting into the business of crude oil exploration in the Permian Basin. If they can use AI to increase their throughput, I would be very impressed. But just another reason to suspect that AI is probably going to change everything. Though not immediately.

JOSH LIPTON: Jared, thank you so much. Appreciate it.