A Reuters poll among economists suggests that the global economy is likely to continue on a strong course, which is bullish for oil. However, some implications may keep prices range-bound. According to the poll, global GDP growth may reach 2.9% this year, driven by strong economic growth in major economies like the U.S., China, and Europe.

Citi’s global chief economist, Nathan Sheets, has stated that the global economy has shown surprising resilience this year. He has revised growth projections upward for major economies and believes that this has led to a solid feeling in the global economy.

The implications of strong economic growth on oil demand are mixed. While strong economic growth typically leads to higher oil demand, elevated inflation due to higher benchmark rates can dampen this demand growth. This could keep oil prices within a certain range unless there is an escalation in the Middle East that poses a threat to supply. The World Bank has warned that if there is an escalation in the Middle East, oil prices could exceed $100 per barrel, contributing to persistent inflation. The chief economist of the World Bank, Indermit Gill, explained that falling commodity prices have hit a wall and interest rates could remain higher than expected if there is an energy shock in the Middle East.