European Central Bank Warns of Energy Market and Price Increases
Speaking at a conference in Berlin, German official Schnabel highlighted declining refinery capacities, low inventories, and competition with Asia.
Speaking at a conference in Berlin, a German official stated that energy price trends are quite concerning, drawing attention to oil, diesel, refinery capacities, and natural gas prices.
Refinery Capacities and Diesel Market
The German official stated in remarks made in Berlin on Monday that the issue is not just about oil, but also encompasses diesel.
She emphasized that refinery capacities have dropped significantly and cannot be rapidly rebuilt.
Natural Gas Inventories and Asian Competition
Speaking at a conference attended alongside German Economy Minister Katherina Reiche, Schnabel also pointed to natural gas prices as a source of concern.
She noted that low inventory levels in Europe and competition with Asia regarding LNG supply pose a problem.
Interest Rate Hike and Inflationary Pressure
As the recent rise in oil prices fueled inflation, the European Central Bank raised borrowing costs by a quarter point to 2.5 percent last week.
This development was recorded as the second interest rate hike implemented since the outbreak of the war involving Iran.
Market Expectations and Future Steps
The bank reiterated that it is making no prior commitment regarding future steps.
Upwardly revised inflation forecasts and data pointing to resilient growth in the eurozone have led markets to price in expectations of further tightening.