Speaking in Dubai: Expert warns rising oil prices to damage exporting countries
The increasing oil prices will have adverse implications for the oil exporting countries, causing deeper economic cycles resulting from reduced global demand for oil, assessed Hans Redeker, the London-based Global Head of Foreign Exchange Strategy at BNP Paribas.
His comments came as oil prices surpassed the level of $41 a barrel.
Speaking in Dubai on the implications of the growing oil prices, Redeker said, although the oil prices have reached the highest in two decades, it has not yet breached the tolerance levels of many high growth oil-consuming economies including China. "Under the current circumstances, oil prices in the range of $40 to $50 for a short term is tolerable for the consumers around the world because of the growth in real income experienced by many countries during the past decade. However, a sustained increase in oil prices beyond $45 level will hurt the viability of many a manufacturing businesses across the world especially in China."
However, according to Khaleej Times, Redeker has warned that a prolonged high oil prices will damage economies around the world rendering many manufacturing ventures unviable leaving a deep impact on the future demand for oil.
"Not so long ago that we witnessed oil prices falling below $10 level and the American strategic stock building came to the rescue of oil prices in the international market. So, it is unlikely that major oil suppliers will let the oil prices go up unbridled." (menareport.com)
© 2004 Mena Report (www.menareport.com)