WTI Crude oil prices achieved an important milestone today, climbing over the psychologically imposing 70 level as energy traders bet on a bullish demand picture. One bolstered by increasing vaccination rates and positive momentum in global travel measures. Much uncertainty remains, however. Higher highs are all but guaranteed given the fragile conditions amid the ongoing Covid pandemic.
Rising oil prices have helped spur inflationary fears in markets given the commodity is typically viewed as a key gauge to measure demand pressures in the global economy. While on the subject, traders will have a close eye on US inflation figures, due out later this week. The consumer price index (CPI) is expected to cross the wires at 4.7% on a year-over-year (YoY) basis. When stripping out food and energy prices, which include oil, the figure drops to 3.5% YoY, still well above the Fed’s 2% average target over time.