Oil Price Surge Sparks Rate Hike Expectations as Inflation Pressures Mount

Oil prices are soaring to new heights, driven by ongoing conflicts in the Middle East and concerns about prolonged inflation pressures.

Crude oil is currently trading above $100 per barrel, with Brent crude briefly topping $108 in Asian trading earlier today.

According to data from CME Group, nearly 90% of respondents expect a rate hike of 25 basis points this week, following the European Central Bank's decision last week to raise interest rates by the same amount.

'The conflict in the Middle East continues to generate inflation pressures, and inflation is set to remain well above target for an extended period,' said the ECB in its decision.

ING analysts also expect the Fed to hike rates, citing the August inflation reading of 3.4%, which remains well above target.