Wall Street in Riyadh sees persistent inflation, with oil hitting $ 100
RIYAD, Oct.26 (Reuters) – Major Wall Street firms warned at an investment conference in Riyadh of the risk of a sustained price hike with BlackRock, the world’s leading asset manager , claiming that there is a “high probability” of oil reaching $ 100 a barrel.
Federal Reserve Chairman Jerome Powell said last week that the US central bank should begin the process of reducing its support for the economy by reducing its asset purchases, but is not yet expected to touch the dial. interest rate.
He reiterated his view that high inflation is likely to subside next year as pressures from the pandemic subside. Read more
Speaking at a flagship investment conference in Saudi Arabia, however, PIMCO Vice President John Studzinski said inflationary pressures are expected to continue over the next few years. “Fewer and fewer people think it’s transient.”
Goldman Sachs chief executive David Solomon also said that a long accommodative monetary policy risked increasing inflation.
“We are looking at a high probability of $ 100 of oil,” said Larry Fink, president and CEO of BlackRock.
Goldman Sachs predicted earlier this week that a strong rebound in global oil demand could push Brent crude oil prices above its year-end forecast of $ 90 a barrel.
Currently, Brent crude is trading at $ 85.7 per barrel.
Natural gas prices are at record highs in Europe and Asia, as major markets like China struggle to find enough fuel to meet demand which rebounded faster than expected after the economic downturn. coronavirus.
Saudi Arabian Mining Co (Ma’aden) CEO Abdulaziz al-Harbi also told Reuters that commodity prices are hitting new highs, but will reach an equilibrium towards the end of 2022.
“Certainly the prices that we are seeing right now are a supercycle and they are being driven by the energy crisis and also by the logistical bottleneck that we are seeing in the world right now.”
“I think in the future there should be a balance, in the near future, probably the end of 2022. And I think the prices are really going to hold up – but not at this high level.”
Reporting by Davide Barbuscia, Saeed Azhar and Yousef Saba; edited by Jonathan Oatis
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