Will oil reach $200 a barrel and petrol R16 per litre?

Economists and analysts are predicting anything from a $200 a barrel 'super spike' in oil prices to a settling down of oil prices to $60 a barrel due to a global economic slowdown. If oil reaches $200 a barrel, South African motorists can expect to pay as much as R16 per litre of petrol and R17.50 for diesel. Senior economist at Econometrix, Tony Twine, said that while the oil price could reach $200, it could also settle to around $60 a barrel, which would result in petrol dropping to around R6 per litre. Gary Ronald of the Automobile Association said $200 for a barrel of oil was "too dreadful to even contemplate". The ministers of the Organisation of Petroleum Export Countries (Opec), the cartel of oil-producing countries, have predicted that the oil price could reach $200 a barrel within two years, but a United Nations report last month suggested that that the global economic slowdown could cause oil prices to fall to $95 a barrel this year and $90 next year. Last week the price of oil hit a record high of $139 a barrel, amid reports it could reach $150 by July because of rising demand and political tension in the Middle East.

 

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From: African Energy News Review (Issue 11-13 June 08)

 

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