Here we go again: the spike in global oil prices that preceded the Great Recession is being repeated. Just three years ago, the price of oil futures on the New York Mercantile Exchange hit $100 per bbl. for the first time, bringing dire warnings about looming economic hardship. Sure enough, the world economy entered its worst downturn since the Depression just months after oil prices peaked at a record $147 per bbl. in July 2008. Now the doomsayers are back, as oil futures crept above $92 per bbl. this week — their highest level since 2008.
Fatih Birol, chief economist at the Paris-based International Energy Agency, which represents the world’s industrialized oil-consuming countries, warned on Monday, Jan. 3, that oil prices are expected to reach $100 per bbl. again soon, threatening the economic recovery by hugely increasing the energy bills of countries, factories, cities and drivers. Birol warns that the rising price “is a wake-up call.”
