According to a media source, the price of oil is continuing to climb near $100 per barrel for the first time in almost a year, giving central bankers additional inflationary concerns. The price of Brent oil, the global standard, surpassed $95 per barrel on Tuesday, reaching its highest level since November 2022, according to The Guardian. Concerns of a supply shortage following recent output reductions by Saudi Arabia and Russia are driving up the price of oil.
Following Russia’s invasion of Ukraine in February, Brent crude prices soared to approximately $130 per barrel, according to The Guardian, fueling the rise in inflation in 2017. Brent crude prices started 2022 below $80 per barrel. At a time when central bankers are edging closer to finishing their cycle of raising interest rates, higher oil prices run the risk of making inflation more enduring. While the Bank of England may decide to raise interest rates once again on Thursday, the US Federal Reserve may decide to keep borrowing prices unchanged on Wednesday.
Bjarne Schieldrop, chief commodity analyst at SEB, predicts that oil demand will weaken should prices continue to rise over $100/barrel.
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