Oil prices breached records in euros and pounds and are approaching all-time highs in Indian rupees and Brazilian reais, raising the prospect that consumer demand will deteriorate, according to Morgan Stanley.
The CHART OF THE DAY shows the cost of a barrel of Brent crude in dollars, British pounds, euros, Indian rupees, Chinese yuan and Brazilian reais, expressed as a percentage of the previous record in those currencies. The price rose to 79.28 pounds on Feb. 23, 2 percent higher than the previous record set in April. Oil climbed to 93.71 euros yesterday, compared with a high of 93.46 euros in July 2008.
“Oil prices are already at record highs in many important places that have already been struggling with slowing growth,” Hussein Allidina, head of commodities research at Morgan Stanley in New York, said in a telephone interview yesterday. “That is demand destruction. I wouldn’t rule out the likelihood of seeing no demand growth this year.”
The International Energy Agency cut its 2012 global oil demand forecast for a sixth month on Feb. 10 as a “darkening” economic outlook reduced prospects for growth. Worldwide oil consumption will increase by 800,000 barrels a day to an annual 89.9 million barrels a day, the agency said, after the International Monetary Fund last month cut its global economic growth prediction.
Europe accounted for 25 percent of global crude imports in 2010 and India 8.6 percent, according to BP Plc (BP/)’s Statistical Review of World Energy.
To contact the editor responsible for this story: Stephen Voss at firstname.lastname@example.org