(Newsroom America) -- Skyrocketing oil prices are threatening to derail a fragile global economic recovery, according to a leading energy watchdog agency, and that could add pressure on the world's producers to ramp up production.
Some members of the Organization of Petroleum Exporting Countries, or OPEC, have said in recent weeks the cartel wanted to see oil prices climb back to about $100 a barrel - a benchmark that is not far off, given Wednesday's price of around $89, according to Quoteoil.com.
But prices at that level and beyond will put substantial downward pressure on the economies of recovering nations, experts believe, as more expensive energy will lead to price increases on nearly all goods.
Already higher oil prices are having an effect on economies, with oil import costs rising dramatically for the 34 mostly rich countries that make up the Organisation for Economic Co-operation and Development. An analysis by the International Energy Agency found that import costs for those nations rose by $200 billion to $790 billion at the end of 2010, the Financial Times reported.
Not all OPEC members agree that $100 oil is sustainable. Oil ministers from Libya, Iran and Venezuela hvae said they prefer prices at that level, but Saudi Arabia - the world's largest producer - has said it prefers oil prices remained at about $75 a barrel instead.
"An issue for OPEC will obviously be prices edging higher," Bill Farren-Price, chief executive officer of Winchester, U.K.-based consultants Petroleum Policy Intelligence, told Bloomberg. "The issue is whether we’re in a new rally and for now the jury’s out on that. And I don’t think anyone in OPEC would disagree with that."
Source: www.newsroomamerica.com
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