Producers in no rush to come to the rescue

With gasoline prices continuing to surge across the world, there appears to be no relief in sight.

Producers that experienced a yearslong crude oil glut do not look to be in a hurry to bail out consumers as demand rises.

Dan Dicker, a longtime energy trader at the New York Mercantile Exchange, media commentator and founder of The Energy Word newsletter, said, "For those (oil-producing) players that are left, like OPEC and Russia, and the majors here in the United States, they've got no appetite to ramp up more because they lost money for six years.

"To see oil prices going above $80(a barrel) with a supply shortage, and people can freeze all they want, these guys aren't about to dip into much of their spare supply, if there is much. And I'm not a big believer that there is much anyway. They're not about to bail anybody out. They want to make some money because they've lost so much money."

A year ago, the price of US benchmark West Texas Intermediate crude was $39.73 a barrel, according to the US Energy Information Administration. On Tuesday, WTI closed at $84.44 a barrel on the New York Mercantile Exchange.

Dicker said oil producers have been living "hand to mouth since 2014".

He added that what is happening in the oil market is endemic of a supply glut that has "decimated most of the producers, including 50 percent of the shale players here in the United States, and it's also annihilated a lot of the investment that lost a ton of money during those six years in those same producers".

"So now that there's less capability to ramp up production, now that there's a shortage, and there's less appetite from investors to invest in startup drilling for small independents because they've gotten burned so badly… there's really nothing on the horizon except for a serious global shortage, with nobody really coming to the rescue," he said.

Many producers scaled back production because of a drop in demand due to people traveling less during the pandemic.

Patrick de Haan, head of petroleum analysis at GasBuddy, a price-tracking website, said: "Oil companies let millions of people go. Not only did US oil producers slow production down, but OPEC did as well."

OPEC, the Organization of the Petroleum Exporting Countries, has said it will gradually raise production targets by 400,000 barrels a day, but that was mainly to offset 5.8 million barrels per day of existing output cuts. OPEC will next meet on Thursday. Russia is a non-member affiliate of the group, also known as OPEC+.

Some observers said that increase may not be enough to ease price pressure, especially with colder weather on the way.

Kieran Clancy, commodities economist at Capital Economics, told CNBC "We think that their refusal to do so (raise production) means that the market will remain in a deficit in Q4, which suggests that oil prices will stay elevated for at least the remainder of this year."