Business | Oil & Gas
Oil at $200 'will break the global economy's back'
The global economy would collapse if oil hit $200 a barrel, said the top energy analyst at Germany's largest bank.
- Bloomberg
- Published: 00:03 June 26, 2008
Tokyo: The global economy would collapse if oil hit $200 a barrel, said the top energy analyst at Germany's largest bank.
"Two-hundred dollar oil would break the back of the global economy," Deutsche Bank's chief energy econ-omist Adam Sieminski said in an interview yesterday.
"Next step after $200 would be global recession and bad news for everybody."
Sieminski's comments come after Goldman Sachs forecast oil may rise to between $150 and $200 within two years as supply growth, especially from producers outside the Organisation of Petroleum Exporting Countries, fails to keep pace with demand. Deutsche Bank is due to release its oil-price forecast tomorrow.
Oil doubled in the past year, touching a record $139.89 a barrel on June 16.
Russia faces its first annual decline in production in a decade. Prime Minister Vladimir Putin pledged to reduce taxation on the industry to stimulate investment in aging fields and new regions.
Output fell 0.9 per cent to 9.76 million barrels a day in the first five months of the year.
"If Russia could reverse some of these policies and get their own oil industry back on, this will help very much," Sieminski said.
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