Oil prices could soar when economic gloom lifts
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Energy ministers from G8 countries have warned that oil prices could again soar when the global economic crisis eases and demand returns. According to a Channel NewsAsia report, the message came during a meeting in Rome which saw ministers of the Group of Eight industrialized nations meet with counterparts from 15 other emerging and oil-producing countries.
“Investments in new energy projects and new technologies are today postponed or cancelled because of uncertainties weighing on financial markets and the reduction in demand,” Italy’s Economic Development Ministry was reported saying ahead of the meet. “When the crisis is over, the risk of insufficient energy supply exists, and as a result high and unstable prices.”
The economic crisis has seen oil demand plummet and prices along with it, falling from a record US$147.50 per barrel in July to US$32.40 in December. It has since risen gradually above the US$60 per barrel mark.
A further surge in oil prices could spell disaster for the aviation industry, which is still feeling the effects of last year’s spike, which brought about an unprecedented rise in airline’s jet fuel costs. It may also spell further gloom for the broader travel industry, with a return to heavy fuel surcharging by airlines potentially discouraging a rebound in consumer air travel demand.
The 23 countries invited to the meeting, including the 15 emerging and oil-producing nations, account for 80% of energy supply and demand worldwide.
Do you think fuel prices will rise to last year’s levels once again? If so, what effect will this have on the aviation sector and the travel industry as a whole? TDA will be tracking this critical issue all the way, so tell us what you think - email info@traveldailyasia.com to Have Your Say.
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