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Oil prices hit highs not seen since last autumn today as experts around the world predicted a new surge in energy costs.
That spells bad news for consumers, for drivers at the petrol pumps who may now have to endure another summer driving season of prices above $1 a litre and for households, which have only just seen falls from all-time-high home energy bills.
The price of a barrel of oil leapt to $71.42 in New York trading, double where it was at the turn of the year following the slump from last July's high of $147 a barrel.
Today's jump came as forecasts pointed to a rebound in global consumption after last year's slump.
In the United States, traditionally the world's largest oil consumer, the Department of Energy revised up its forecasts by 22%, the second time in a month.
It now reckons prices will average $67 a barrel in the second half of the year.
It believes global consumption of oil, which has fallen by nearly two million barrels a day this year, will begin to rebound in 2010 as the global economy recovers.
British supermajor producer BP says it believes that the world is currently in a situation where it will have to learn to live with an oil price of up to $90 a barrel. Speaking at BP's annual energy forecasting symposium, chief executive Tony Hayward said: “There is a rational argument to say that somewhere between $60 to $90 a barrel is the right sort of level.”
But he warned of huge volatility in oil markets as China has leapfrogged the mature economies of the West in energy consumption.
“The centre of gravity of the global energy markets has tilted sharply and irreversibly towards the emerging nations of the world, especially China,” he said.
“This is not a temporary phenomenon but one that I believe will only increase still more over time.
“It will continue to affect prices and this shift will bring volatility in the short term,” Hayward added.
Reader views (5)
What else would you expect the chief executive of BP to say?
Speculation has creamed this commodity everyone is cutting back in use. The price is being kept high by OPEC. One thing to remember the government will not stop this rise as 90% of the money spent at the pumps goes on tax. Fact is all new cars will be more fuel efficient than they currently are. Expect unleaded cars to be doing 80-90 MPH within two years. Leave the speculation to the gamblers; Oil prices will fall long term not rise as the switch to other sources of energy are brought on stream. Expect the price to rise short term as the players grab short term profit long term expect 30-40 dollars a barrel
- Gary, Brentwood 2, 10/06/2009 16:13
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Hasn’t anyone told the Business world we are in a recession?
It doesn’t take long for them to start screwing us again; does it?
Call their bluff; don’t buy petrol; get a bike instead.
But you won't; so start paying out again you suckers; money makes the world go around, and the rich love you for it.
- Mickyinlondon, london, 10/06/2009 15:09
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MP's could not care less if fuel prices were to hit £10.00 per litre at the pumps.
WHEN DID GORMLESS BROWN LAST PAY TO FILL UP A CAR?
MP's CAN CLAIM THE FULL COST ON THEIR OBSCENE EXPENSES.
- Reuben Camara, Morecambe, Lancaster, 10/06/2009 14:29
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'Investment bank Macquarie today said in a research report that it expects steel-making coal prices to rebound 9% as Chinese demand ramps up.'
Just watch the Chinese jump in and buy shares on every price dip: they need to dump their dollars before the USA inflates away their value. They won't buy the coal, they'll buy the company and others like it, to safeguard their supplies. It's curious to see Communists playing the capitalist game more successfully than the 'experts'.
- Mdj E10, london uk, 10/06/2009 13:07
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Coal traded on NYMEX between $20-$60 between 2002 and 2007. The last couple of years saw a spike up to almost $130, and of course the producers now think they should get that all the time. It's unrealistic, and their costs for digging up what's already in the ground certainly didn't more than double (ask the guys who mine it if they got 100% pay rises!)
- Paul, London, 10/06/2009 10:11
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