Brent rises 3.4% to $112.47 as Canada warns of broader inflation
Key Facts
Brent crude futures rose 3.4% to $112.47 a barrel on Thursday morning, 22 October 2026, according to Investing.com, as the Bank of Canada warned of the risk that higher energy costs could spread to prices for other goods and services. Crude reached that level at 09:40 GMT, according to the price snapshot reported by the website. Oil's rise came as official U.S. data showed a larger-than-expected decline in crude inventories. Stocks fell 3.1 million barrels in the week ended 16 October, according to data cited by Investing.com. The rise in crude coincides with a warning from Canada's central bank that persistently expensive oil and higher refining margins increase the risk of price pressures spreading across the economy.
Bank of Canada Governor Tiff Macklem said the bank expects to raise its quarterly inflation forecasts significantly because of persistently high crude and petroleum product prices, according to Reuters. He described the forthcoming revision as a "significant" increase in the forecasts, linking it to persistently high energy prices. He noted that shipments remain disrupted and refining capacity has been damaged, among the reasons for the growing risk of broader and more persistent inflation. The pressures the governor discussed include petroleum product prices alongside crude prices, with shipments still disrupted and refining damaged. Macklem identified the central issue as whether these high prices would spread to the broader economy, saying the focus was on "whether high oil and petroleum product prices will pass through to the rest of the economy".
Higher oil prices have mixed effects on the Canadian economy, according to the Bank of Canada's explanation in its April Monetary Policy Report. Canada is a net oil exporter, making higher prices a source of support for national income. The bank said in the report: "Since Canada is a net oil exporter, its national income will be boosted." Higher oil prices, however, put pressure on consumers by increasing the costs they bear. Those cost increases also extend to businesses, according to the report, alongside the economy's gains in national income.
In Canadian equities, the S&P/TSX Composite Index ended the session on Thursday, 15 October, up 1.55%, according to an Investing.com report on mid-month trading. The index closed that session at 36,137.10 points. That put it at its highest level in 3 weeks, according to the report. In another earlier session covered by the website, the Canadian index rose during Tuesday trading as Middle East tensions eased and risk appetite improved. The index extended the previous session's gains at the time, a move Investing.com linked to easing tensions and the resulting support for investors' appetite for risk.
On monetary policy, the Bank of Canada held its target for the overnight rate at 2.25% in its decision on 2 September 2026. The next interest rate decision is due on 28 October 2026, according to the central bank's calendar. The announcement is scheduled for 09:45 Eastern Time. The bank will publish its Monetary Policy Report the same day, following Macklem's comments about the forthcoming increase in inflation forecasts because of crude and petroleum product prices. The decision and report will be followed by the publication of the Governing Council's summary of deliberations on 10 November 2026, according to the bank's announced schedule.