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High Inflation Could Linger as Commods Prices Spike Again: World Bank

OIL

High inflation could remain for longer as the 2-year decline in commodity prices has plateaued, according to the World Bank, cited by Business Insider.

  • The World Bank warned that significant disruption could propel oil prices beyond $100/b, which would add a full percentage point to global inflation in 2024.
  • Oil prices have already been elevated by cuts to OPEC+ production which have been extended until Q2. Tensions in the Middle East have also added a geopolitical risk premium to crude.
  • Fears of lower growth and high inflation were on show in US data for PCE and Q1 GDP.
  • Q1 Core PCE price index: 3.7% (3.4% expected, 2.0% prior) - unrounded figure to follow shortly. Q1 GDP: 1.6% (2.5% expected, 3.4% prior).
  • This means that the Fed will likely further delay rate cuts, which had previously been predicted to begin in June.
  • Any rate cut could stimulate economic growth and would drive up oil demand, thus becoming more bullish for oil prices in the longer term.
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High inflation could remain for longer as the 2-year decline in commodity prices has plateaued, according to the World Bank, cited by Business Insider.

  • The World Bank warned that significant disruption could propel oil prices beyond $100/b, which would add a full percentage point to global inflation in 2024.
  • Oil prices have already been elevated by cuts to OPEC+ production which have been extended until Q2. Tensions in the Middle East have also added a geopolitical risk premium to crude.
  • Fears of lower growth and high inflation were on show in US data for PCE and Q1 GDP.
  • Q1 Core PCE price index: 3.7% (3.4% expected, 2.0% prior) - unrounded figure to follow shortly. Q1 GDP: 1.6% (2.5% expected, 3.4% prior).
  • This means that the Fed will likely further delay rate cuts, which had previously been predicted to begin in June.
  • Any rate cut could stimulate economic growth and would drive up oil demand, thus becoming more bullish for oil prices in the longer term.