[OPE] OPEC "lost control over prices" - $250 a barrel in prospect according to Gazprom

From: Jurriaan Bendien (adsl675281@tiscali.nl)
Date: Fri Jun 27 2008 - 07:59:15 EDT

Gazprom chief Alexey Miller told the Financial Times that the world was undergoing "a great surge in oil and gas prices which will end with prices at a radically new level". He added that even Opec had no real influence on prices. "Not a single decision has been passed of late that would really influence the global oil market." (...) competition for gas and other energy resources was growing, he said, and stood by his prediction that the price of oil would hit $250 a barrel next year. http://money.ninemsn.com.au/article.aspx?id=587775

If that is the case, the world recession will be deeper and longer, since producers cannot adjust to such a price hike just in one year, "sound fundamentals" notwithstanding. Necessarily this means rising price inflation.

"There is also an international dimension to inflation: low Fed rates mean that countries with currencies pegged to the dollar have to choose between exchange rate appreciation and high domestic inflation. So far they have accepted the latter - and stoked up global inflation in the process - but another risk is that they reverse course and allow the dollar to fall." http://www.euro2day.gr/ftcom_en/126/articles/342512/ArticleFTen.aspx


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