International oil prices rise to highest levels of the year

The global economy is growing weary of inflation again, with international oil prices passing 90 dollars a barrel for the first time this year. Many voiced concern that skyrocketing oil prices may again fuel inflation, which had shown signs of easing recently, and the likelihood of the Fed’s austerity measures lasting longer.

According to the London ICE futures exchange on Tuesday (local time), the Brent crude oil price for November closed at 90.04 dollars per barrel, exceeding the 90-dollar mark for the first time this year, up 1.04 dollars (1.2%) from the previous day. West Texas Intermediate (WTI) crude oil for October delivery rose 1.14 dollars (1.3%) and closed at 86.68 dollars per barrel, the highest since Nov. 15, 2022.

Surging oil prices are fueled by growing concerns about supply shortage as Russia and Saudi Arabia unexpectedly announced that they would continue to reduce production by 1 million barrels per day until the end of the year. Also with the weather growing colder, demand for heating oil is likely to increase. Growing inflationary pressure will be inevitable for Korea, where the inflation rate climbed to the 3% range for the first time in three months in August.


Do-Hyong Kim dodo@donga.com