July 18, 2007	Wednesday	Rajab 02, 1428

LONDON, July 17: The world economy is bounding ahead, largely unaffected by record high crude oil prices, which have quadrupled over the past six years, economists say. Oil prices have surged close to record peaks in recent days owing to tight global supplies and fierce demand led by the United States and China -- the first and second biggest consumers of energy in the world.

A barrel of crude oil on world markets cost just $20 at the start of 2001 -- and has since risen to close to $80.

The world economy will grow by a robust 4.9 per cent this year and next, slightly down from 5.4 per cent in 2006, according to forecasts from the International Monetary Fund.

Deutsche Bank economist George Buckley argues that recent bumper gains in crude oil prices will be unlikely to crimp global economic growth.

“It could be the other way around,” Buckley said. “I think it’s more likely that the strength of global growth is pushing commodity, including oil, prices up quite sharply.

He explained that the economic growth rates of China and other emerging countries were “good reasons to think why oil prices have gone up so much.”

According to the International Energy Agency, growth in global oil demand stood at just 0.9 per cent in 2006, when the market was rocked by record high prices.

But the IEA’s current world forecast for this year is 2.0 per cent -- despite oil prices soaring close to historic high points.

And emerging economic powerhouse China is forecast to record growth in oil demand of 5.0 per cent in 2007.—AFP