Oil prices could grow over $100 a barrel

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JEREMY HOBSON: Well that blizzard has helped oil prices reach a two-year high. Cold weather forces people to use energy to heat their homes, which drives up prices.

But as Marketplace’s Stephen Beard reports from London, there are other forces sending the price of oil skyward.

STEPHEN BEARD: Ministers from the OPEC oil cartel met in Cairo this weekend and they sent a pretty clear message to the markets: they do not intend to pump more oil, to increase supply and bring down the price of crude. The Kuwaiti Oil Minister said he thought a $100 a barrel would not harm the global economy.

Nick McGregor is an oil analyst with stockbrokers Redmayne Bentley. He believes the oil price is headed towards $100 and beyond, because of the surprising strength of the global recovery:

NICK MCGREGOR: That’s pushed up consumption which has risen by one and a half million barrels a day during 2010 and that has ultimately has had an upward push on crude prices as people start looking forward to a world recovering from recession.

The rising price of oil is pushing up the cost of goods and services around the world. And that is causing such concern in China that this weekend the Chinese raised their interest rates to slow down the rampant growth of their economy.

In London this is Stephen Beard for Marketplace.