The Risk Of A Major Oil Price Spike Is Now The Highest Since The Financial Crisis
Robin Emmott, Reuters
BusinessInsider.com
Jun. 22, 2014
BRUSSELS (Reuters) – Iraq will be foremost in investors’ minds in the coming week as oil price risk has returned to markets, complicating the task for central banks whose policies are beginning to diverge for the first time since the global financial crisis.
Oil prices neared nine-month highs late last week, touching $115 a barrel, and the rapid advance of militants in Iraq, the second-largest OPEC producer, is destabilising oil markets.
That has implications for inflation in the United States and Europe, as well as Asia’s export-oriented economies that are large net importers of oil.
Investors will be watching a range of data, from German and Japanese consumer prices to first-quarter U.S. GDP, to see how the Federal Reserve, the European Central Bank (ECB), the Bank of England and the Bank of Japan respond.
“Just as oil prices had become increasingly stable, we reckon the risk for an oil price spike is now the highest since the global crisis,” said Christian Keller, an economist at Barclays. “We think a further price spike of 10 to 15 percent from here is not implausible,” he said.
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