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Dollar weakness spurs oil price rises

Daily Telegraph Getty image

Head of the International Energy Agency warned that soaring oil
prices could push the world economy into recession

Daily Telegraph: Dollar weakness spurs oil price rises

Last Updated: 1:19am BST 23/04/2008

Fears of a worldwide recession are growing as the relentless increase in the price of oil shows no sign of slowing.

Oil prices were within a whisker of $120 a barrel in New York yesterday, reaching a peak of $119.90 before closing at $119.37.

The pattern was similar in London where North Sea Brent, the trading benchmark, rose $1.91 to $115.95.

Pleas for calm from Saudi Arabia’s oil minister were ignored as continued weakness of the dollar, down again against the runaway euro on the back of another set of weak US home sales data, helped drive the price into new territory. Analysts said that the dollar was “dominating everything.”

Further disruption in Nigeria, where Shell has been forced to cancel contracts because of fresh attacks on oil installations by militia groups has added to worries about the supply outloook.

Worries about shortages have dominated the International Energy Forum in Rome where the International Monetary Fund has called on Opec producers to accelerate production plans and Nobuo Tanaka, head of the International Energy Agency warned that soaring oil prices cold push the world economy into recession.

Ali al-Naimi, the Saudi oil minister, said there was no immediate shortage of oil. He told a closed session of the conference: “This is not the time to panic and grasp for exotic unproven solutions.”

He added: “I have observed an unprecedented level of uncertainty, doubt and even fear in discussions about the future of energy and its impact on global economic prospects..” The problem, he declared, was not an oil shortage but limited capacity along the entire supply chain.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/04/23/cnoil123.xml

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