High oil prices threaten to worsen a global economic slowdown and crude producers should consider boosting output, the chief economist for the International Energy Agency said today.
“The current high oil prices have the potential to strangle the economic recovery in many countries,” Mr Fatih Birol said in a speech in Singapore. “I hope that high oil prices don’t slow down Chinese economic growth and the negative effect that would have on the global recovery.”
Crude has jumped to $100 a barrel from $75 in October amid signs the US economy will likely avoid a recession. Most economists expect global economic growth to slow next year as Europe’s debt crisis threatens to drag the continent into recession.
Mr Birol suggested crude producers should boost output amid growing demand in developing countries and falling inventories in wealthy nations.
The Organisation of Petroleum Exporting Countries is meeting later today in Vienna to decide whether to change the cartel’s output quotas.
“I’m sure OPEC knows much better than me what to do,” Mr Birol said when asked if OPEC should raise output. “But seeing that oil prices are still high today and the negative effect that has on the recovery of the global economy, I hope the energy producing countries will take these things into account and make their decision accordingly.”
Mr Birol said crude prices could rise to $150 by 2015 if oil-producing countries in the Middle East and North Africa don’t invest $100 billion a year to maintain the existing fields and develop new ones.