Oil price will do little to prevent inflation rates from falling further – Commerzbank

Since June, the Oil price has risen 30%. Economists at Commerzbank show how far the rise could go and analyze the consequences for the economy and inflation.

Oil prices with downward potential

Given the weak global economy, further upside potential is likely to be largely exhausted, even if Saudi Arabia continues its production cuts. In fact, as soon as the US enters a recession, prices are likely to fall again. 

We expect the price of Brent to trade just below $90 per barrel on average next year. Only a further significant supply cut from Saudi Arabia or a soft landing of the US economy would likely be able to prevent this from happening.

The Oil price will do little to prevent inflation rates from falling further.