Stagflation consternation as OPEC sticks to the plan

Tuesday 5th October 2021Oil prices rose quickly this morning after OPEC+ announced they would stick with their earlier plans of rising production in November by 400 thousand barrels a day. At one stage Brent and WTI were both up more than 3 percent. NAB’s Ray Attrill says it was a surprising response, because there wasn’t a particular expectation that they would rise production. Nonetheless it has added to inflation concerns, and raised more talk about stagflation – will the price increases dampen demand and slow the jobs recovery? It’s a dilemma for central banks and governments. So far though, inflation isn’t having a big reaction on production. The manufacturing ISM in the US was strong n Friday, so was consumer spending. Markets will be watching the data today to see whether demand from the services sector is continuing to push ahead.

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