The South African Reserve Bank (SARB) said on Tuesday in its latest Monetary Policy Review that a number of factors continue to place upward pressure on oil prices, with little relief expected until later this year.

The Bank notes that oil demand continues to grow apace in China, India and Russia, where fuel prices are heavily subsidised.

It adds that more oil is now also being needed in the Middle East itself.

As a result the US Energy Information Administration predicts that even with falling consumption being projected in the US, oil demand worldwide will jump by 1.2 million barrels a day this year.

"The fact that the oil market currently has little spare capacity to tap in a crisis has also attracted greater speculative interest in the market," concludes the Bank.

Stubbornly high oil prices were highlighted in the MPR as one of they key risks to inflation expectations going forward.

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