Crude has rallied more than 15% since mid-August following an increase in consumption as countries emerge from the worst of the pandemic. The energy crunch from Europe to Asia also raised the prospect of greater demand for oil ahead of winter at a time when OPEC+ producers decided to only gradually add back oil supplies to the market.

President Biden’s administration become more vocal about its growing concerns that high energy prices could derail the global recovery market. In addition to Granholm’s comments on Wednesday, the White House has been in communication with OPEC, pushing them to boost their output. “The key to remember is that the Biden administration is very keen on having low gasoline prices for consumers,” Amrita Sen, chief oil analyst at Energy Aspects Ltd., said in a Bloomberg Television interview. “So if prices continue to go up and overheat, then they will be putting pressure on OPEC.” It is “only a matter of time” before OPEC+ accelerates supply increases, especially if oil remains over $80/bbl, according to Citigroup Inc. The group’s decision to stick with an increase of only 400,000 barrels a day for next month was clearly an effort to maximize short-term revenues as demand escalates and inventories drop, analysts said in a note on Wednesday.

Meanwhile, Russian President Vladimir Putin’s comments earlier this week on European gas supplies were a deliberate attempt to calm an increasingly unstable market, said two people with knowledge of the country’s energy policy.  There were some strings attached to the potential offer of record Russian gas export volumes this year, perhaps the quick approval of the Nord Stream 2 pipeline. But the people said the overriding motivation behind Putin’s statement was to bring down prices that had run too high.

Oil extended its rally from a seven-year high a day after OPEC+’s decision to keep its supply agreement in place as energy prices spike stoking concerns that more petroleum products will be used in power generation. U.S. crude futures advanced 1.7% Tuesday, heading closer to the key, psychological $80-a-barrel level. At an OPEC+ meeting on Monday, Saudi Arabia and its partners opted for only a modest output increase of 400,000 barrels a day for November. U.S natural gas futures jumped to a 12-year high as global as global shortages of that fuel fanned fears of a shortage in the U.S ahead of winter in the northern hemisphere. “There is no room for error in the system,” said Phil Flynn, senior market analyst at Price Futures Group Inc. “If we get a cold winter these prices could go up dramatically.”

Meanwhile, the industry-funded American Petroleum Institute reported U.S. crude stockpiles rose 951,000 barrels last week, according to people familiar with the data. Both the U.S. and global crude benchmarks have surged this month with rising energy prices stoking fear of inflation forcing consumers to pay more for everything from gasoline to heating, food and plastics. Goldman Sachs Group Inc. forecast that power generation could add an extra 650,000 barrels a day to oil demand this winter due to high gas prices.

Underlying oil market gauges are also showing signs of strength. West Texas Intermediate crude’s so-called Dec.-Red-Dec. spread, a favored trade of the world’s hedge funds, topped $7.50 a barrel this week, the strongest on a rolling basis since 2019.

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After a relatively quite summer, oil is now joining natural gas, coal and a host of other vital commodities in a potent rally that threatens to upend the world’s recovery from the coronavirus pandemic by spurring inflation and disrupting industries. The Organization of Petroleum Exporting Countries and its allies aren’t standing idly by while this happens. They already boosted production by almost 2 million barrels a day this year — about 2% of world demand — and have promised to add 400,000 barrels a day each month until September 2022. Yet the incremental approach the cartel agreed back in July sits increasingly uneasily alongside a spiraling global energy crisis. In the governments and central banks of the world’s largest economies, there’s palpable anxiety about the coming winter. “It’s not that OPEC+ does not recognize the coming supply shortage,” said Bjornar Tonhaugen, head of oil markets at Rystad A/S. “The group is well aware of the global inventory draws, maintenance work and rising demand, but chose to wait until later this year to adopt a bolder supply approach.”

Going into Monday’s OPEC+ talks, there had been speculation that the cartel could opt for a larger supply increase. There was widespread anticipation “that it was going to be an 800,000 barrel-a-day temporary boost in November,” said Rob Thummel, a portfolio manager at Tortoise, a firm that manages roughly $8 billion in energy-related assets. However, no such proposal was made, OPEC+ delegates said, asking not to be named because the meeting was private. When it became clear that the group wasn’t going to give any extra, West Texas Intermediate crude jumped as much as 3.3% to $78.38 a barrel in New York, the highest since November 2014.

Despite the misplaced expections, the current oil market is looking good for OPEC+. Crude is trading at multiyear highs without prompting a surge in rival supplies. Saudi Arabia’s oil revenue is the highest since 2018. All this means the kingdom is “keen to tweak the current OPEC+ deal of monthly increases as little as possible,” said Amrita Sen, chief oil analyst and co-founder of consultant Energy Aspects. Getting every member of the 23-nation coalition to agree to the current output policy was no mean feat. The deal was forged in a series of acrimonious meetings that exposed deep fissures between Saudi Arabia and the United Arab Emirates — two of the group’s closest allies. That long ordeal was the climax of more than a year of tumult and hardship — from a historic slump triggered by the pandemic to a vicious price war between Russia and Saudi Arabia. Yet the delicate balance that OPEC+ has achieved is at risk due to spillover from external crises.

The shortage of natural gas, which has sent prices of the fuel to the equivalent of $190 a barrel, is spurring a switch to oil products for heating and manufacturing. That trend could boost overall demand by about 500,000 barrels a day, according to Amin Nasser, chief executive officer of Saudi state oil company Aramco. At the same time, U.S. oil production is still struggling to recover from Hurricane Ida, which has knocked out a total of almost 35 million barrels after slamming the Gulf of Mexico a month ago. That’s the equivalent to almost two full months of OPEC+ supply increases.

Goldman Sachs Group Inc. said its base case is for Brent crude to rise as high as $90 a barrel, from about $81 currently, Damien Courvalin, the company’s head of energy research, said on Bloomberg TV.  Oil inventories are about to reach the lowest in 10 years, he said. In this environment, the oil market is looking to OPEC+ for guidance, but there was no press briefing after the meeting. “We anticipated the group would signal prices may have overreacted lately, or that it would indicate crude exports from the Middle East are likely to increase over the coming months,” said Giovanni Staunovo, a commodity analyst at UBS Group AG, said in a note. “But neither issue was addressed.”

There’s little sign so far of the kind of political pressure that could get the cartel to change course. Before Monday’s meeting, Washington told Riyadh it was satisfied with the current pace of OPEC+ supply hikes, a U.S. official said, asking not to be named because the talks were private. The Americans did make clear that they want the group to remain attentive to the market, particularly any spillover from natural gas, said the official. “OPEC+ have to be careful not to allow prices to inflate too much,” said Rystad’s Tonhaugen. “Otherwise we may see an adverse reaction that could negatively impact post-pandemic economic growth.”