Oil Price 'Heading for 60 Dollars A Barrel'
Fears were growing today that oil prices could reach 60 US dollars a barrel after the cost of crude in New York hit yet another milestone.
The latest rise to 55.33 US dollars came amid continued concerns over winter fuel supplies.
Economists said the sky-high levels were already having an impact on the economy and manufacturing, although at a lesser rate than during the 1970s.
Motorists have also been feeling the pinch, with the cost of unleaded petrol on UK forecourts now at an average of 83.66p a litre, the AA reported.
Alex Scott, economist at Seven Investment Management, said oil prices were already hitting the economy to some degree, adding: “The question is at what point does it get really painful?”
Oil would probably have to move to around 80 US dollars a barrel to compare with the crippling price hikes of the 1970s, he said.
CBI director general Digby Jones also warned today that the manufacturing recovery was under threat because of the rising price of oil and other commodities.
Richard Slape, of stockbroker Seymour Pierce, said he expected the cost of crude to continue to drive forward in the short term.
He said: “To say 60 by the end of the year certainly doesn’t seem unrealistic.”
Short supplies and growing demand – worsened by factors such as disruption in Iraq and recent hurricanes – have pushed the cost of crude consistently higher.
The price of oil has soared almost 75% higher over the past 12 months.
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