Instability In Middle East Threathens World Oil
Insurrections in Middle East countries such as Libya is causing major concerns to the world economies who are just recovering from the 2008 economic crash which happened when oil prices were at an all time high.
Further instability in these vital oil countries such as Libya and Algeria may cause oil prices to reach as high as $220 a barrel according to strategists which is double the current oil price of $119 a barrel. The effects of increasing oil prices will be far reaching with higher petrol prices and heating costs. This can push inflation up which has already doubled at 4% causing a possible future rise in interest rates.
The outlook is not pretty as oil production already slowing down with Libya’s 1.6 million barrels already down by 50%. The greatest concern to the World economy is if the uprisings and unrest spreads to other North African countries including the Middle East. Fuel prices rise in the UK is expected to filter through this weekend with a rise of 3 pence making the average cost of a litre of fuel at £1.34. This may rise again to 5 pence a litre by the end of March depending upon the outcome in Libya. Saudi Arabia has already increased oil production by 4 million barrels in order to make up the short fall.