Higher oil prices could knock the global economic resurgence off course, analysts have warned, as the price has jumped by more than 50 per cent since its most recent low point in June 2017.
JP Morgan and Barclays have both raised their forecasts for the oil price over the next year, and Morgan Stanley analysts warn it poses "upside risks" to inflation forecasts, as higher oil prices typically lead to higher energy and fuel costs which feed through into higher prices for other goods and services.
Rising inflation is seen as a key risk to economic growth in part because it could force central banks to hike interest rates more quickly, putting the brakes on business and household spending, and on stock markets, according to the Daily Telegraph.
The strong global economy itself has contributed to the rise in prices by increasing demand for oil.
JP Morgan analyst Abhishek G Deshpande predicts this growth will take demand up from 98.6m barrels per day now to 101.1m by the end of the year.
But factors including the crash in Venezuelan supply, Opec's moves to withhold supply and risks in the Middle East have contributed just as much to the rise in prices, JP Morgan believes.
Higher prices should encourage shale and other producers to ramp up supply of oil.
"US producers will eventually respond to stable higher prices with new tight oil drilling that will likely result in a hangover for oil prices in the following quarters," said Michael Cohen at Barclays.
"Furthermore, current price levels are likely to encourage additional drilling elsewhere in the world as producers seek to take advantage of attractive economics."
But if that fails to materialise, or any other unexpected pressures squeeze supply further, it could send oil to around US$84 ($114) per barrel, the highest level since late 2014 – with more serious repercussions globally.
"A negative supply shock of similar magnitude to this year's could push prices up a further 20 per cent and shave 0.5 percentage points off of global growth," said JP Morgan economist Bruce Kasman.
So far the rise in prices appears to have been outweighed by rising consumer confidence, low unemployment and rising wealth, which have kept the global economy accelerating – though this too may not last forever, as unemployment in countries such as the US will struggle to fall much lower.
Currently analyst Abhishek Deshpande at JP Morgan expects oil to rise to US$78 per barrel in the coming months before falling back towards US$60 in the final quarter of the year.