ICE oil hit $78.65 a barrel on Monday and is still at its highest level since October 2018. Crude oil inventories have been falling, with US inventories nearing a three-year low. At the same time, higher natural gas prices seem to boost demand for oil as users change fuels.

Oil prices have soared more than 50 per cent since the start of the year as global demand recovers from disruptions caused by the outbreak. On the supply side, OPEC and its allies, including Russia, have been slowly easing production restrictions, tightening markets. In addition, extreme weather in the United States has also depressed local production.

In the fourth quarter and the start of winter in the northern hemisphere, many market watchers say prices will rise further. Among themGoldman Sachs Group Group said the market deficit was larger than expected and raised its year-end Brent crude forecast by $10 to $90 a barrel..

Global central banks may "tighten" the pace or accelerate

The gradual recovery of demand from the recession caused by the epidemic in 2021 also created a series of price pressures. Inflation has gradually become a difficult problem for policy makers to ignore.

Transport costs have risen nearly fivefold since the beginning of 2019, and there has been a similar unusual rise in raw materials and food prices, according to the Financial Times. There is a shortage of semiconductors worldwide-especially in the automotive sector, where manufacturers are struggling to meet consumer demand because of delays in delivery. The emergence of supply chain bottlenecks and the COVID-19 epidemic hindered the steady flow of goods, prices began to rise, and the prospect of slower growth further intensified.

Prices continue to rise, adding to the uncertainty about the outlook for the central bank's price forecasts. The standard mode of operation of many central banks assumes that they know as much as possible about employment levels, the production of goods and services, and manage spending levels accordingly to keep inflation low and stable. But at present, the central bank should not only assess the "headwind" that the epidemic brings to the economy, but also guard against the persistence of inflation. Therefore, the central bank needs to estimate the level of supply and demand while setting interest rates.

Growing evidence of labor shortages, coupled with a clear recovery in spending this week, has made the Fed inclined to raise interest rates more aggressively. The Fed's monetary policy meeting in September showed that policymakers were about to quickly scale back their bond-buying programs since the outbreak. Officials' bitmap shows that the possible time for the Fed to raise interest rates in the future has been advanced to 2022.

Donald Cohen, a former vice chairman of the Federal Reserve at the Brookings Institution, said: "the Federal Open Market Committee (FOMC) believes this should be done because inflation looks more sustainable and it risks a faster-than-expected wage and price spiral. "

The Bank of England also expects prices to rise sharply, suggesting that inflation is likely to continue to be higher than previously forecast (above 4% for most of 2022). Philip Rush, founder of Heteronomics, a consultancy, said there was a clear "hawkish bias" in the Bank of England's previous minutes. As a result, most economists see the central bank's words as a sign that they will start raising interest rates in February, a date that is unlikely to last until November.

Like the Fed, the BoE's tone is very different from that of earlier this summer, when both central banks set obstacles to be overcome before considering tightening policy.

The euro zone, on the other hand, faces other problems, such as lower inflation and 1 million job losses. ECB President Christine Lagarde reiterated that inflation is "temporary". When the bottleneck is resolved, the prospect is "functioning normally". But she also said high energy prices remained a long-term problem, with economic growth and inflation recovering faster than the ECB had expected.

Ms Lagarde's reassurance is not entirely in line with what an ECB vice-chairman said this week. "there is a risk of greater inflationary pressures in the future," Luis de Gindos said in an online interview with the Financial Times, especially if recent inflation is partly supported by rising energy costs, leading to higher demand for wages.