Rising oil prices derail global economy

Source: Press TV
http://www.presstv.ir/detail/158700.html


The International Energy Agency (IEA) has warned that increasing oil prices are entering a "danger zone" that could threaten the fragile global economic recovery.

"Oil prices are entering a dangerous zone for the global economy," chief economist Fatih Birol from the IEA told the Financial Times newspaper on Wednesday.

"The oil import bills are becoming a threat to the economic recovery. This is a wake-up call to the oil consuming countries and to the oil producers," he further explained.

Oil prices have edged closer to $100 a barrel in recent weeks and Brent crude hit $95 a barrel for the first time in 27 months on Monday.

The economist also pointed out that it was not in the interest of any country to see such increasing oil prices.

According to Birol, the need for oil import will decrease and economies would further weaken if prices persist to rise.

The official further added that oil-consuming countries also need to reduce their reliance on oil, especially for transportation.

The warning from the IEA puts the pressure on oil producers to increase production to bring down prices but officials from the Organization of the Petroleum Exporting Countries said recently that they did not intend to change oil quotas.

The IEA's warning comes just months after International Monetary Fund officials dismissed suggestions that rising oil prices would hamper economic recovery.