This can mainly be related to robust demand for oil emanating from particularly the economies of China and the US, notable supply side shocks emanating from the hurricane season, and continued geopolitical concerns. The oil price is likely to continue exhibiting considerable volatility and is expected to remain at relatively high levels in the near term mainly due to strong demand and supplyside tightness.
The rise in global energy prices will continue to exert downward pressure on the purchasing power of households and international inflation is likely to continue edging upwards in the  BIS Review 81/2005  1  next few months. World inflation is projected to increase to 3,9 per cent in 2005 from 3,7 per cent in 2004.