Yesterday the International Energy Agency (IEA) warned that crude oil prices could rise above $150  a barrel in the short term if political unrest in Africa and the Middle East leads to inadequate investment over the coming years.  The UK Guardian reports that the IEA believes the high cost of crude posed a threat to the world economy and there is a risk of prices exceeding the previous peak of $147 a barrel seen in 2008.

“In 2011, $102 is the average price through to today which means the global economic recovery is at risk. We are in the danger zone for the global economy at current levels,” IEA economist Fatih Birol told a news conference.

“There is a possibility that production growth from the Middle East and North Africa (Mena) region may not be what the consumers would like to see. This would be a pity for the global economy, a pity for the oil sector and a pity for those governments.”

The IEA says that if investment in the MENA region is  one-third lower than the $100 billion a year required between 2011-2015, consumers could face a near-term rise in the oil price to $150 a barrel.

The think tank is expecting demand for energy to grow by a third between 2010 and 2035, with two thirds of the increase coming from the fast-growing emerging countries, and says enormous investment in exploration, drilling and refining will be needed for supply to keep pace.

 

 

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