Hamas' deadly attack on Israel sent oil prices soaring to $89 a barrel. Photo: Anadolu Agency
After this, a third wave of inflation looms Oil prices have risen sharply since the deadly Hamas attack on Israel, economists warn.
The price of Brent crude rose 5% on Monday to reach $89 per barrel amid fears that the war will escalate tensions in the Middle East. , which could potentially trigger sanctions and supply shortages.
It came as Israel's central bank struggled to stabilize the economy after its currency, the shekel, fell as much as 2.7% against the dollar, a seven-year low.
The currency recouped some of its losses after the bank said it would sell up to $30 billion of foreign currency and maintain U.S. dollar liquidity in markets with up to $15 billion of swap lines.< /p>
p>Meanwhile, the dollar rose as investors fled to safe-haven assets, also pushing gold to a one-month high. Sterling fell 0.2% against the dollar and the euro fell as much as 0.4%.
Economists are also concerned about the threat of a global recession if the US and Saudi Arabia are dragged further into the economic crisis. turmoil.
Israel is not an oil producer, but there are concerns about Iranian involvement in Saturday's shock Hamas attack that killed 250 people. If the US tightens sanctions on Iranian oil exports, it will have a serious impact on global supplies.
There is also a risk of rising tensions between Saudi Arabia and Iran.
Adding to the uncertainty, European gas prices rose 17% on Monday, the biggest increase since August, after Israel ordered Chevron to suspend production at the Tamar field. in the country due to security problems.
George Lagarias, chief economist at Mazars Consultants, said: “As West Texas Crude approaches $90 again, we risk a third wave of inflation. This could lead to prolonged inflation, rates being raised or kept in place even longer than expected, and economic growth slowing.”
A third wave of inflation will follow the post-Covid supply chain disruptions that triggered the first wave. and the war in Ukraine and the subsequent energy crisis, which led to the second.
Goldman Sachs forecasts the price of Brent crude will rise to $100 a barrel by June 2024, a calculation that does not take into account the additional risk to supply from the conflict in Israel.
Trigger a third wave If inflation occurs oil prices should reach about $95 a barrel and remain there for three or four months, Mr. Lagarias said. This will lead to higher gasoline prices and industrial production costs and trigger a second winter energy crisis.
The surge in oil prices will hit the real economy faster than previous shocks because workers have become accustomed to high inflation and will be quicker to demand higher wages, Mr. Lagarias warned.
He said the consumer is now more prepared for inflation, which means that transmission mechanisms will work much faster.»
That in turn would push central banks to raise interest rates further, Mr. Lagarias warned. “I bet that a prolonged oil crisis will lead to even higher prices.”
Oxford Economics said that if oil prices rise to $95 and remain there, 0.4 percentage points will be added to the global inflation rate in 2024. This means the global inflation rate will be 4.6%, based on the current forecast of 4.2%. . If the price of oil rises to $110, global inflation will reach 5.1% next year.
In the UK, forecasters say a $95 oil price will add 0.2 percentage points to consumer prices, resulting in which will bring the rate to 3.4%. If oil prices rise to $110, UK inflation is forecast to rise to 3.7%.
Ben May of Oxford Economics said: «This could put some sort of upward pressure on inflation expectations and lead to underlying inflation falling.» Inflation is a little more resilient in the short term, and wages are a little tighter.»
Oil prices are still below their peak of nearly $96 in late September, having fallen in recent weeks on fears of a slowdown in global demand. In the UK, BAE Systems was the biggest gainer on the FTSE 100 on Monday, rising 4.7% as investors turned their attention to defense shares. . Oil companies BP and Shell rose 3.2 percentage points and 2.9 percent, respectively.
Among the biggest losers was IAG, owner of British Airways, which fell more than 6 percent. BA said it would operate flights to Israel in the coming days, but with adjusted departure times.
Energean, the oil and gas company listed in Tel Aviv and London, on Monday became Europe's biggest loss after losing fifth of its value.
Свежие комментарии