IEA: $100 OIL IS “VERY BAD” FOR GLOBAL ECONOMY, RISKS 2008 REPEAT

Some analysts have estimated that the breaking point for oil is much higher than today’s prices, however, Nobuo Tanaka, executive director of the International Energy Agency says current prices are much closer to causing serious economic decline than most assume.  In an interview with CNBC this morning Tanaka says supplies are plentiful, however, Libya will cause disruptions in the near-term.  Tanaka says $100 oil is not sustainable and will contribute negatively to the economy and could actually cause a repeat of 2008:

“If the $100 barrel is continued in 2011 the burden of oil to the global economy is as bad as 2008 and remember – 2008 was the crisis year….It is really serious today….If maintained (the burden is as bad as $150 in 2008)…If prices remain at $100…continuing that level of price is very, very bad to the global economy. Especially to the emerging economies like India, China, Africa, so they have much more serious problem,”

Source: CNBC

-------------------------------------------------------------------------------------------------------------------

Got a comment or question about this post? Send me a message on Twitter or send me an email here and I'll get back to you shortly.

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

More Posts - Website

Follow Me:
TwitterLinkedIn