Did the Reserve Bank jump the gun as oil sets itself up for $50 a barrel?

By Stuart Lowman

Not so long-ago major oil traders were licking their lips predicting a return to $100 crude.

And with South Africa a major energy importer and inflation drifting towards the upper band of 6%, the Reserve Bank’s ‘coin-toss’ saw a 25-basis point rate hike last week.

Only a week later and now many editorials have shifted their thinking towards oil at $50 a barrel, and what that means for the world economy.

The local petrol price is set to fall around R1.50 in December, and it’s one of the bigger contributors to inflation.

So, did SARB get it wrong? Only time will tell, but forecasting is a mug’s game as Nobel laureate Nils Bohr once said: “Prediction is very difficult, especially if it’s about the future.”