The Financial Post reports in its Friday edition that the price of gasoline is starting to surge everywhere, an inflationary omen for central banks and governments.
A Bloomberg dispatch to the Post reports that futures soared to a nine-month high in New York, sending shock waves through to the pump, while prices have also been rising in Asia. Markets for gasoline have tightened worldwide due to unexpected refinery outages plus lower-than-normal stockpiles in key storage hubs such as the U.S. Gulf Coast and Singapore for this time of the year.
In global energy markets, it is telling that while crude oil futures are little changed year-to-date, U.S. gasoline contracts have rallied by more than 20 per cent. The resurgence in gasoline potentially poses a headache for central banks including the United States Federal Reserve as policy makers grapple with the problem of how much more monetary tightening, if any, is needed to bring inflation to heel. Energy prices are one of the many factors that have contributed to surging inflation globally. Citi economist Andrew Hollenhorst says, "Higher energy costs may push up consumer prices and lead to renewed goods inflation -- a sector where price increases have slowed."
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