Oil costs edge greater as international demand reignites inflation worries

il costs have risen to the very best degree in almost a yr as demand for the commodity prompts renewed worries over international inflation.

Brent crude oil surpassed 97 US {dollars} per barrel on Thursday, the very best degree since early November.

It has been edging in direction of the 100 greenback mark which was final hit greater than a yr in the past.

The current spike in oil costs comes after two of the world’s largest producers, Russia and Saudi Arabia, introduced manufacturing cuts earlier this yr.

The psychologically necessary milestone of 100 US {dollars} a barrel is in sight, which is prompting issues about greater vitality prices being handed on by corporations within the type of greater costs

The transfer helped enhance the worth of the commodity which has been climbing steadily since mid-August.

Susannah Streeter, head of cash and markets at Hargreaves Lansdown, mentioned: “Concerns about tight supplies are fuelling the rise in oil prices, reigniting worries about inflation and the need for interest rates to stay higher for longer.

“Brent crude has swept past 97 US dollars a barrel as the effect of Saudi Arabia and Russia’s extended production cuts takes hold and data shows a faster than expected drawdown of crude stocks in the US.

“Despite slowing economies in Europe and fragility in China, global demand for oil for now continues to ramp up, to meet the seemingly insatiable needs for transportation, power generation and other petrochemical activities.

“The psychologically important milestone of 100 US dollars a barrel is in sight, which is prompting concerns about higher energy costs being passed on by companies in the form of higher prices.”

Last week, the Bank of England voted to maintain rates of interest unchanged for the primary time in virtually two years.

But policymakers saved the door open for additional rises sooner or later, promising to “take the decisions necessary” to return inflation to regular ranges.

It comes as inflation within the UK slowed to six.7% in August, down barely from 6.8% in July, official figures confirmed.

Meanwhile, the US Federal Reserve additionally determined to carry rates of interest, whereas the European Central Bank pushed by one other price hike regardless of the eurozone economic system teetering on the sting of a recession since final yr, rising solely 0.1% in every of the primary two quarters this yr.

“Another leg up in oil prices has added to the market worries about sticky inflation, thereby stoking fears that interest rates will stay higher for longer,” mentioned Russ Mould, funding director at AJ Bell.

“The market is worried that supplies of oil are going to be tight and if prices keep going, it is going to cause a real headache for businesses and consumers.”

Content Source: www.normal.co.uk

Oil costs edge greater as international demand reignites inflation worries

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