Oil Prices Not Likely to Hurt Global Economy
Phil Dodge, energy analyst at the Stanford Group, told CNBC’s “Power Lunch” that rising oil prices are unlikely to trigger a global economic slowdown.
He said the Organization of Petroleum Exporting Countries (OPEC) appears comfortable with the price at $55 to $65 a barrel.
“I think if the price moves into the high $60s or $70s (a barrel) and if that were sustained, that could be a problem,” Dodge said Monday. “But if that were to happen, OPEC would raise production to bring the price back down to about $60.”
Angola, which joined OPEC on Jan. 1, had been one of the largest non-OPEC producers in terms of growth. “That will tend to tighten the market medium term,” he said.
Dodge said Russia’s production is growing, but isn’t large enough to disrupt the market. Mexico’s production is declining, and Venezuela is having difficulty maintaining production.
The price of a barrel of oil on the New York Mercantile Exchange recently rose six cents to $57.17 a barrel. The price peaked last July at $78.40.