The combination has pushed up oil prices by 30%, to more than $90 a barrel. The bulls base their case on the surprising resilience of oil demand. Bulls also see that supply cuts are filling producers’ pockets, opening the possibility they may be extended again. They believe that the recovery in China’s oil demand has already happened, even if that of the economy at large is far from complete, since lockdowns had an outsize effect on activities, such as those involving transport, that are thirsty for oil. Pressure from high oil prices is reaching “core" inflation, which excludes food and energy costs, as firms in other sectors, starting with transport, raise prices to compensate.

Source: Mint October 04, 2023 05:35 UTC