The world oil prices soar this Monday until reaching new multi-year highs Due to the strong demand and shortage of supplies, which caused inflation problems and generated a bad start to the day in most of the European stock exchanges.
The oil Brent from London reached a maximum of three years when it reached $ 84.38 per barrel, while crude New York WTI jumped to a seven-year high $ 81.72.
The recent decision by OPEC and other large producers not to increase production has put world supply in a tight spot.
“The nerves are still clearly evident in the markets,” OANDA analyst Craig Erlam told AFP. “The energy crisis is one of the main concerns in the coming months, while concerns about inflation and the prospect of tighter monetary policy are some of the many headwinds in the economy.”
Oil was also boosted last week by record natural gas pricesBut these have declined following recent comments by Russian President Vladimir Putin.
Gas soared last week due to the recovery in demand from the economies that recovered before the winter in the northern hemisphere, with maximum demand. This has convinced some consumers to switch from gas to oil.
“Extremely high natural gas prices … (is) likely to increase demand for petroleum products to replace expensive natural gas”Said Bjarne Schieldrop, an analyst at SEB. “But never before have we experienced a situation like this on such a scale … (where) natural gas prices are twice the price of oil”.
The rise in oil prices, meanwhile, lifted the London stock market on Monday, due to its great weight in the energy sector. By contrast, Frankfurt and Paris fell on fears of inflation in early afternoon trading.
“European markets are in an uncertain situation,” said IG analyst Joshua Mahony. “With inflation fears still looming, it is unlikely that we will soon see a return to bullish optimism,” he said.
Meanwhile, most Asian markets rose on Monday to prolong last week’s rise after US lawmakers avoided a painful debt default.
Reduction of the Federal Reserve
The latest rise in oil aggravated concern about inflationas the Federal Reserve prepares to reduce its ultra-lax monetary policy.
The great failure of job creation in the US last month did not change expectations that the Federal Reserve will begin to reduce its massive bond buying program, as it seeks to keep a cap on price increases just as the global recovery shows signs of slowing down.
Attention will turn to the release of inflation data from China and the United States this week, as rising prices around the world are increasingly problematic for governments as economies reopen and demand for goods is limited again.
This week the start of the corporate earnings season is also expected.
(With information from AFP)