Friday, March 4, 2011

Markets have been spooked by fear that we may be in for a 1970s style oil shock. Oil price worries are keeping markets from rallying further. Calculations show world GDP growth will halve to 2.1 percent in 2011 from current projections only if Brent crude oil reached $150 a barrel, a 30 percent increase from Friday's prices.

Oil will have to reach as high as $191 to wipe out world growth, based on assumption that a $10 percent rise in oil prices trims global growth by around 0.5 percent.