Tags: BP | Oil | Prices | Growth

BP: High Oil Prices May Threaten Global Economic Growth

Tuesday, 06 Dec 2011 10:29 AM

 

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The fragile economic recovery could be negatively affected by high oil prices, especially in the United States, BP's chief executive said on Tuesday.

Despite the looming threat of a sharp economic slowdown in Europe affecting demand for oil around the world, oil prices have remained above $100 for most of 2011 thanks largely to strong growth in Asia and instability in producing countries.

Stubbornly high oil prices now have the potential to affect economic growth and hit demand for oil, Bob Dudley told executives from the world's largest oil and gas producers gathered in Qatar.

"It is important in the current situation of a fragile global economy and I think right now we are probably walking a fine line," Bob Dudley told the World Petroleum Congress in Doha.

"It is impossible to say what price exactly will affect the economic recovery but we do know which regions will be affected most," he said, adding that the United States was most vulnerable because of its slim fuel tax buffer to soften the blow of rising oil prices through pump price tax cuts.

"There is a risk that in the world's largest economy and largest oil consumer, the United States, could be hit by a lack of supplies and a high price of oil with consequences for the rest of the world," he said, adding that any slowdown in the U.S. economy would inevitably weigh on global growth.

Standard & Poor's on Monday warned it may carry out an unprecedented mass downgrade on the credit ratings of euro zone countries if EU leaders fail to reach an agreement on how to solve the region's debt crisis in a summit later this week.

Brent crude oil has is on track for its highest average price in 2011 despite growing economic woes in Europe.


© 2014 Thomson/Reuters. All rights reserved.

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