Global economy is coping with oil prices, says Opec
August 19, 2004
By Andrew Mitchell
London - Opec producers have said they had seen little impact on economic growth so far from oil's relentless price surge, which yesterday racked up yet another record high.
Opec said in its monthly oil market report that it had raised production in July and expected further increases in August and September, to keep prices under control.
US oil futures set a high of $47.03 (R305) a barrel yesterday, up nearly $10 a barrel since the end of June. Record peaks have been set in all but one of the last 14 trading sessions on the New York Mercantile Exchange.
Opec said the world economy seemed to be coping just fine. "The direct contribution of the concern-driven rise in oil prices to the economic slowdown in 2004 has been very small," the cartel's report said yesterday.
Opec's reference basket price was last valued at $41.75 a barrel, after spending all this year above its $22 to $28 a barrel target.
"Much will depend on how long the price of the Opec reference basket remains above $35," the report said.
"The effect would be greater in 2005. The impact on the developing world would be greatest in the large trading economies of southeast Asia."
Oil prices are surging as rapid demand growth, led by China and the US, stretches the world supply system.
German Chancellor Gerhard Schröder said yesterday it was important to carefully monitor oil costs but record crude prices ere not yet affecting economic growth.
Opec said it had raised production by 599 000 barrels a day in July to 29.57 million barrels a day, a level that should permit a substantial build in world oil inventories in the fourth quarter.
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