World oil prices are at their highest level since the days before the Iraq war one year ago. Oil analysts say rising demand in Asia and low inventories in the United States are responsible for the increase.
Oil prices have reached a one-year high. In New York, oil for April delivery is priced at close to $37 a barrel and in London North Sea oil is priced at over $33.
Oil analysts say the price rise depresses global economic growth but as yet there is little danger of higher priced gasoline tipping the world economy into recession. That could happen, however, if the price goes much higher. A price close to $40 a barrel price is viewed as a danger zone for economic growth.
Speaking on Bloomberg television, Andrew Milligan of Standard Life Investments in Scotland said there is a possibility, if certain events take place, the price could enter the danger zone. "If we get strikes-as we sometimes do in Venezuela; if there are problems in Russia; if Asian demand continues to remain quite strong, there's quite a number of factors to take into account on the supply-demand balance. And there is certainly a danger that we're going to see $35 to $40 prices into the (northern hemisphere) summer," he said.
Several experts had predicted that once the Iraq war ended oil prices would decline sharply. Instead they have held steady even as Iraq's oil exports have recently recovered to pre-war levels. The American administrators in Iraq say that country is now exporting two point three million barrels of oil per day and that the rehabilitation of the oil industry is now well ahead of schedule.