a half, world oil prices, and commodity prices in general, experienced a sustained upward movement, often called the “ super - cycle ” ( chart 3 ). by far the most important reason for this long - term trend is the rising demand for these products stemming from rapid economic growth in china and other emerging - market economies. 1 researchers kilian and lee estimate that demand shocks accounted for about 60 per cent of the increase in oil prices during the run - up from us $ 30 a barrel to us $ 140 a barrel. see l. kilian and t. k. lee, “ quantifying the speculative component in the real price of oil : the role of global oil inventories, ” journal of international money and finance, 42 ( april 2014 ) : 71 ‒ 87. bis central bankers ’ speeches it would be hard to exaggerate the importance of the integration of china, india and other emerging economies into the world economy. the economy of china alone doubled in size between 2007 and 2013, an expansion built on the production of goods requiring energy to manufacture. with rising living standards, chinese households have been able to afford cars and other products that consume energy. china ’ s oil consumption followed suit, doubling over the past decade to about 10 million barrels a day and making the country the world ’ s second - largest consumer of crude oil. this growing demand for energy put continued upward pressure on oil prices. over time, the industry responded by stepping up exploration, developing higher - cost sources, and making some major technological breakthroughs. with the recent drop in oil prices, some commentators have been quick to declare that the super - cycle is finished, but these underlying forces still have a long way to run ( chart 4 ). the urbanization and industrialization of emerging economies and the growth of their middle classes is far from complete. china ’ s urban population has grown by about 300 million people since 2000 but, even now, only 55 per cent of its people live in urban areas, compared with more than 80 per cent for north america and advanced asian economies such as japan and korea. according to some estimates, another half - billion people in china and india alone will move to cities and likely join a growing middle class over the next two decades. as long as these trends continue, they will add to world demand for oil. the disappointing global cconomy although the forces underlying the commodities super - cycle are still at work, demand for oil is likely to expand on a slower track than in

march 2013 ecb staff macroeconomic projections for the euro area foresee annual hicp inflation in a range between 1. 2 % and 2. 0 % in 2013 and between 0. 6 % and 2. 0 % in 2014. in comparison with the december 2012 eurosystem staff macroeconomic projections, the ranges are broadly unchanged. in the governing council ’ s assessment, risks to the outlook for price developments continue to be seen as broadly balanced over the medium term, with upside risks relating to stronger than expected increases in administered prices and indirect taxes, as well as higher oil prices, and downside risks stemming from weaker economic activity. turning to the monetary analysis, monetary figures for january 2013 support our assessment that the underlying pace of monetary expansion continues to be subdued. the annual growth rate of m3 remained broadly unchanged at 3. 5 % in january, after 3. 4 % in december 2012. the annual rate of growth of the narrow monetary aggregate, m1, increased to 6. 7 % from 6. 3 % in december 2012. the deposit base of mfis in a number of stressed countries strengthened further in january. the annual growth rate of loans ( adjusted for loan sales and securitisation ) to non - financial corporations stood at – 1. 5 % in january, after – 1. 3 % in december 2012. the annual growth in mfi loans to households moderated slightly to 0. 5 %, from 0. 7 % in december. to a large extent, subdued loan dynamics reflect the current stage of the business cycle, heightened credit risk and the ongoing adjustment of financial and non - financial sector balance sheets. at the same time, available information on the access to financing of non - financial corporates indicates tight credit conditions for small and medium - sized enterprises. in order to ensure adequate transmission of monetary policy to the financing conditions in euro area countries, it is essential to continue reducing fragmentation of euro area credit markets and strengthening the resilience of banks where needed. decisive steps for establishing an integrated financial framework will help to accomplish this objective. the future single supervisory mechanism ( ssm ) is one of the main building blocks, together with a single resolution mechanism ( srm ). both are crucial elements for moving towards reintegrating the banking system. to sum up, the economic analysis indicates that price developments should remain in line with price stability over the medium term. a cross - check with the signals from the monetary analysis confirms this picture. while the accommodative