What's going on?

Oil�s price hit a seven-year high over the weekend, but the world�s biggest producers don�t seem in a hurry to do much about it�

What does this mean?

There�s a serious shortage of coal and natural gas right about now, and countries� stockpiles of the fuels are running low too. That�s sent prices soaring, which has forced companies to switch to a more affordable alternative: oil. Trouble is, that demand is now pushing up its price too, with a barrel of the slippery elixir hitting $80 a barrel for the first time since 2014.

There is a plan to keep its price down, it�s true: OPEC+ � the group of major oil-producing countries � intends to increase supply by 400,000 barrels a day. But economists aren�t sure that�ll be enough, and investors were hopeful the group might agree to boost supply by even more when it met last week. Not quite: OPEC+ announced that it�s sticking to the plan.

Why should I care?

For markets: The Bank of England admits defeat.
Oil is essential to pretty much everything from transport to manufacturing, so a pricier barrel makes goods across the board a little more expensive too. Cue the Bank of England, which warned over the weekend that it�ll probably be raising interest rates much sooner than expected. That�ll make it more expensive for companies and households to borrow, which should put the kibosh on spending and slow down price rises.

The bigger picture: The price isn�t right.
Those price rises are hitting everyday consumers too, especially now that governments are rolling back their pandemic support packages. That might partly be why Goldman Sachs is suddenly less confident about the US recovery: the investment bank cut its economic growth forecast for 2021 from 5.7% to 5.6% over the weekend, and its 2022 forecast from 4.4% to 4%.