CERA: $70 Crude In ‘07 Would Cut Global Economic Growth

Despite the current high prices, CERA expects world oil demand to grow by 1.7 million barrels a day, or 2.1%, this year, but cautioned that similar prices next year would cut into expectations of similar demand growth rates in 2007.

“The continuing decline in the oil intensity of the global economy is a key reason that the world economy can better handle high prices today, compared with the 1970s and early 1980s,” Chairman Daniel Yergin said in remarks prepared for delivery to a Washington conference. CERA estimates that in 1980, it took nearly $72 worth of crude oil to generate $1,000 of real global economic output, but it now takes just $41 of crude to generate that level.

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