Oil rises as US sanctions raise supply worries
Bleak outlook for transport inflation
Annual transport price inflation increased to 2.2% in September after being in deflationary territory for the previous three months.
Oil prices were up on Friday after the US tightened its sanctions programme against Russian crude exports, raising supply concerns in an already tight market, and global inventories are forecast to decline through the fourth quarter, Reuters reported.
Brent futures rose 94 cents, or 1.1%, to $86.94 per barrel. U.S. West Texas Intermediate (WTI) crude gained $1.07, or 1.3%, to $83.98 a barrel at 0630 GMT.
The US imposed the first sanctions on owners of tankers carrying Russian oil priced above the G7's price cap of US$60 a barrel, to close loopholes in the mechanism designed to punish Moscow for its invasion of Ukraine.
According to the Namibia Statistics Agency (NSA), annual transport price inflation increased to 2.2% in September after being in deflationary territory for the previous three months. Overall inflation increased to 5.4% in September, compared to 4.7% recorded in August. Year to date (January to September), inflation averaged 6%.
The ministry of mines and energy in October announced an increase in fuel prices. Petrol prices for ULP95 increased by N$1.90, while diesel prices for 50ppm and 10ppm jumped by N$2.40.
In Walvis Bay, the price of petrol is now N$22.88 per litre, while diesel 50ppm costs N$23.15. Diesel 10ppm costs N$23.35 per litre.
Outlook
According to Simonis Storm, “given the cost nature of fuel, especially diesel for various industries, we expect inflation rates to increase in every category.”
PSG also concurred with Simonis Storm and noted that rising fuel price inflation will keep inflation elevated across the board. Due to the recent Israel-Hamas conflict and extended oil production cuts by Saudi Arabia and Russia, oil prices are likely to trend higher in the short term. “This poses a risk to inflation and we expect more fuel price hikes this year as a result of recent developments,” PSG said.
Lastly, IJG said inflationary risks remain to the upside, with higher, volatile, oil and fuel prices and a strong US dollar presenting central banks around the world with fresh challenges in their efforts to keep inflation in check and could result in interest rates remaining higher for longer.
At the previous monetary policy announcement in August, the Bank of Namibia (BoN) projected inflation to average 5.6% in 2023.-phillep@nmh,.com.na
Additional reporting by Reuters
Brent futures rose 94 cents, or 1.1%, to $86.94 per barrel. U.S. West Texas Intermediate (WTI) crude gained $1.07, or 1.3%, to $83.98 a barrel at 0630 GMT.
The US imposed the first sanctions on owners of tankers carrying Russian oil priced above the G7's price cap of US$60 a barrel, to close loopholes in the mechanism designed to punish Moscow for its invasion of Ukraine.
According to the Namibia Statistics Agency (NSA), annual transport price inflation increased to 2.2% in September after being in deflationary territory for the previous three months. Overall inflation increased to 5.4% in September, compared to 4.7% recorded in August. Year to date (January to September), inflation averaged 6%.
The ministry of mines and energy in October announced an increase in fuel prices. Petrol prices for ULP95 increased by N$1.90, while diesel prices for 50ppm and 10ppm jumped by N$2.40.
In Walvis Bay, the price of petrol is now N$22.88 per litre, while diesel 50ppm costs N$23.15. Diesel 10ppm costs N$23.35 per litre.
Outlook
According to Simonis Storm, “given the cost nature of fuel, especially diesel for various industries, we expect inflation rates to increase in every category.”
PSG also concurred with Simonis Storm and noted that rising fuel price inflation will keep inflation elevated across the board. Due to the recent Israel-Hamas conflict and extended oil production cuts by Saudi Arabia and Russia, oil prices are likely to trend higher in the short term. “This poses a risk to inflation and we expect more fuel price hikes this year as a result of recent developments,” PSG said.
Lastly, IJG said inflationary risks remain to the upside, with higher, volatile, oil and fuel prices and a strong US dollar presenting central banks around the world with fresh challenges in their efforts to keep inflation in check and could result in interest rates remaining higher for longer.
At the previous monetary policy announcement in August, the Bank of Namibia (BoN) projected inflation to average 5.6% in 2023.-phillep@nmh,.com.na
Additional reporting by Reuters
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