Oil price is continuing its march towards $100 a barrel for the first time in almost a year, creating new inflationary headaches for central bankers, a media report said.

Brent crude, the international benchmark, pushed over $95 per barrel on Tuesday, the highest since November 2022, The Guardian reported.

Oil is being driven up by concerns of a supply deficit, following recent output cuts by Saudi Arabia and Russia.

Brent crude began 2022 below $80 per barrel, before soaring to around $130/barrel after Russia invaded Ukraine last February — fuelling the surge in inflation last year, The Guardian reported.

Higher oil prices risk making inflation more persistent, just at a time when central bankers are inching towards ending their cycle of rising interest rates. The US Federal Reserve may leave borrowing costs on hold on Wednesday, though the Bank of England may vote to hike again on Thursday.

Bjarne Schieldrop, chief commodity analyst at SEB, predicts that oil demand will weaken should prices continue to rise over $100/barrel.

Schieldrop said, β€œThe overall situation is that Saudi Arabia and Russia are in solid control of the oil market. The global market is either balanced or in deficit and both crude and product stocks are still low.

“Thus, we have a tight market both in terms of supplies and inventories, so there should be limited downside in oil prices. We are highly likely to see dated Brent moving above $100/barrel. It is now less than $5/barrel away from that level, and only noise is needed to bring it above,” The Guardian reported.