Europe inflation fears hit by twin impact of Brent spike and dollar rebound

London (Quantum Commodity Intelligence) - The twin impact of surging Brent prices and a rebound in the dollar has supercharged inflation for wholesale oil product prices in Europe in June, Quantum data shows Wednesday.

Recent signs of brewing runaway consumer prices has fuelled speculation central banks may be forced to raise interest rates, although it seems unlikely while economies have yet to recover from lockdowns.   

Euro related prices have jumped between 7.75 and 9.5%, while UK pound prices have closely followed with gains between 7.5 and 8.5% from the start of the month to June 22.

Dollar related prices have risen between 5.25 and 7%.

Fuel oil saw the highest and lowest inflation bursts.

High sulfur fuel oil barge prices in ARA were up 9.5% in euros, 8.5% in UK pounds, and 7% in dollars over the month to date.

Marine fuel 0.5% sulfur barges in ARA were up around 7.75% in euros, 6.75% in UK pounds, and 5.25% in dollars.

But because marine fuel 0.5% currently trades around $110/mt higher than high sulfur, outright, values of both grades have risen around the same level.

Euro prices for premium unleaded gasoline barges in ARA have jumped 9% compared to 8% in UK pounds and 6.5% in dollars.

Diesel barges in euros were up 8.75% compared to 7.75% in UK pounds and 6.25% in dollars.  

Brent prices hit their highest since 2018 Wednesday, while the dollar index has rallied from under 90 points at the start of June to over 91.75 points this week.