Senior Analyst Jens Pedersen at Danske Bank assessed the potential scenario of higher crude oil prices and their probable impact on inflation and ECB’s QE. “More broadly, the oil price is quietly ticking higher (and base metals with it) on first signs that the US oil glut is receding and Saudi supply uncertainty”. “While it is still early days with CPI growth hovering in deflationary territory across the developed world, we may increasingly see markets gear up for ‘global re-flation’ as a theme in the medium term”. “This should eventually kick-start the discussion of when and how the ECB will taper its bond purchases and put focus on the fact that the unprecedented ECB-Fed monetary policy divergence will not continue forever”. “That said, we probably need to see sustained increases in inflation rates for this to move to the top of the market agenda and for the single currency much will depend on whether Draghi manages to convince investors (and the rest of the Governing Council) that an uptick in headline inflation is not enough to start a tapering discussion; core inflation and wage growth must give in as well”.