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Brown warns of oil price rise
London, Dec 19 (Agencies):
Published on 20 Dec. 2008 12:52 AM IST
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Oil prices could jump again as the world economy recovers from the downturn, Gordon Brown has warned. The Prime Minister was hosting a summit of energy ministers from the OPEC cartel of oil-producing states in London. The meeting was called when oil prices were hitting record highs above $140 a barrel during the summer, pushing petrol prices over £1 per litre. Now oil has fallen below $40 a barrel as a global slowdown cuts demand. Mr Brown said that the collapse in oil revenues among oil-producers could ultimately lead to another price spike when economic growth resumes. He said that if OPEC nations cut back their investment in oil production, demand will eventually come to exceed supply again, forcing prices up. Britain wants “a new partnership between oil-producing and oil-consuming countries,” Mr Brown said. Without greater stability and predictability in oil prices, consumers will inevitably be hit by more fluctuations in the future. “Wild fluctuations in market prices harm nations all round the world,” Mr Brown said. “They damage consumers and producers alike.” He added: “The risk now is that investment in oil and other energy sources will once again stagnate, supply capacity will begin to tighten just as demand responds to improving economic conditions.” Mr Brown has previously offered oil-rich countries the chance to invest in alternative energy production in Britain and other Western economies, including wind, wave and nuclear power. The Prime Minister believes that by diversifying the world’s energy production, leaders can bring greater stability to the global economy. “We will need a new partnership between oil-producing and oil-consuming countries,” Mr Brown said. “Because as with the global financial crisis, this global crisis in our energy markets cannot be solved by one nation or one continent alone, but demands a truly international response,” he said.

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