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Surging oil prices threaten an inflationary spike that some say could derail the efforts of central banks, such as the Bank of Canada, to wind down their cycle of interest-rate hikes. Good morning, Is oil about to reignite another fire under inflation ? It’s a question on many minds after two of the biggest suppliers of the world’s most important commodity raised the temperature last week. Saudi Arabia shocked markets on Sept. 5 by announcing that a voluntary cut of 1 million barrels a day initially pledged for just July would be extended until the end of the year. Its OPEC+ ally Russia followed suit, extending its cut of 300,000 bpd. Article content Brent crude shot up above US$90 a barrel for the first time since November 2022 on the news. This morning the benchmark was trading at US$90.50 and U.S. West Texas Intermediate crude at US$87.08. The squeeze will draw down oil inventories just as consumption is growing. Rystad Energy predicts that global demand will exceed supply by about 2.7 million bpd in the final quarter of this year. It also threatens an inflationary spike that could disrupt the plans of central banks, such as the Bank of […]
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