Brent Crude Tops $126, U.S. Gas Prices Jump

Brent crude climbed past $126 a barrel early Thursday, its highest level since the 2008 financial crisis, while U.S. gasoline prices rose to $4.30 a gallon. The moves reflect intense pressure on global oil supply at a time when demand has been recovering steadily from pandemic lows. When Brent crude rises sharply, it pulls up the cost of almost everything that moves or is made using energy, fuel, freight, fertilizer, plastics, and food. Higher U.S. pump prices hit consumer spending directly, since households have less money left for other goods and services. For markets, sustained oil at these levels raises inflation expectations and puts pressure on central banks to tighten policy faster than planned. The key question now is whether major producers can or will step up output quickly enough to cool prices, and whether demand destruction, consumers cutting back because fuel is too expensive, kicks in before supply catches up.