The price of oil has hit an all-time high in London, rising above $146
a barrel, with New York crude prices not far behind. Tendai Maphosa
reports for VOA from London analysts do not see an end to the price
increases anytime soon.
The prices of crude have reached record levels, but the bad news, analysts say, is they have not peaked yet.
Mitchell, an energy analyst at the London research center Chatham
House, tells VOA prices will keep rising unless there is a sharp drop
"This has been building up quite slowly, but now it
is very serious and therefore people are responding to it. It takes
time for that response to take effect but people are already ... you
have seen car sales in the United States go down very drastically and
the switch from big cars to small cars that will take an effect over
the next year or two, so I would certainly be very surprised if we saw
prices anything like this high in one year or two years time," he said.
Treasury Secretary Henry Paulson, who is visiting London, also says
there are no quick fixes and prices would keep rising. He met with
British Chancellor of the Exchequer Alistair Darling to discuss oil
prices and other economic issues.
Darling said there is a need
for a global response. "The problems that our economies face today are
very much international in nature. Whether it is the credit crunch
which is now affecting every country in the world or the huge threat
posed by very high oil prices and the inflationary effect that can have
or rising food prices. These are international problems that will need
countries to work together and the United States and the United Kingdom
share a common interest and we have a shared commitment."
says while high prices are causing difficulties in rich countries, they
wreak havoc in the developing nations. "I think we will see it in the
developing countries because there the price shock is much more severe
where they have been protected by subsidies from the price so far but
governments cannot continue to subsidize at these prices so there is
real problems there and it is difficult for them to switch or to
economize transport the basic need and I think we will see trouble,
riots, protests, great political difficulties for the importing
The plain facts of supply and demand are widely
blamed for the rising prices. But, some reports are also blaming
market speculators for driving prices higher, as well growing tension
in the Middle East, especially the continuing speculation that Israel
might attack Iran's nuclear facilities.