The European Central Bank said risks to future oil and natural gas prices remain elevated because of geopolitical developments involving the Middle East, Ukraine, and Russia. Minutes published Thursday showed that, while oil prices are still well below recent highs and the futures curve has softened, prices remain well above pre-war levels across the projection horizon. The ECB said this points to persistent increases in oil prices, with risks still tilted to the upside. It also said the recent decline in oil prices has not eased the medium-term inflation path implied by market pricing. At the same time, the central bank said inflation expectations remain anchored. The ECB reiterated that it will continue to deliver on its mandate to maintain price stability and will act in a timely manner to achieve its 2% medium-term inflation target.
On Aug. 27, the European Central Bank said the risks hanging over future oil and natural gas prices are still elevated because of geopolitical developments in the Middle East, Ukraine, and Russia.
According to ECB meeting minutes published Thursday, oil prices right now are still "well below recent highs," and the futures price curve has softened. But the minutes also said oil prices remain "well above pre-war levels over the whole projection horizon," a sign that oil prices have kept rising and that risks are still tilted to the upside.
The ECB also said the recent fall in oil prices "has not alleviated the medium-term inflation path reflected in market pricing," and added that "inflation expectations remain anchored." And the central bank repeated that it will keep carrying out its mandate to maintain price stability and "act in a timely manner" to hit its 2% medium-term inflation target.
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