Friday, May 23, 2008

Surging oil could deal blow to sputtering world economy

Surging oil could deal blow to
Article from: Agence France-Presse
May 22, 2008 03:00pm
THE latest spike in crude oil prices could deal a crippling blow to the global economy, analysts believe.

Crude futures this week soared past the level of $130 a barrel for the first time, having more than doubled in the past year.

The jump appeared to fulfill predictions from some analysts of a super-spike that could take oil to $150 to $200 a barrel.

The possibility of 150-200 dollars per barrel seems increasingly likely over the next six to 24 months," he said in a research note.

The reality of sky-high energy costs could mean a darker outlook for the US and global economy, by raising the price of a variety of goods and services.

The notion of a quick recovery in the struggling US economy would likely be put in doubt, and the rest of the world would suffer as well.

"A super-super spike would most likely put a stake in the heart of global economic growth," says Ed Yardeni, economist at Yardeni Research.
"A global economic downturn would be the most likely outcome, led by a longer and deeper recession in the US."

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