Fifth Generation

The crude oil prices which have been in a downtrend for the last few weeks due to slowdown fears

across the globe, touched a new low this week at 113 dollars. Experts feel that crude prices

might touch below 100 dollars levels in coming weeks since demand from China and India are also expected to crash post Olympics. OPEC countries might go for a production cut shortly in order to avoid further crash in prices which will reduce their realization. Even after the steep 23% drop from the peak level, the prices are nearly 100% higher than what they were a year ago.

The steep hike in Crude oil prices has been there ever since 2007 end and it has been taking its toll on developing countries like India and China very badly. The crude oil price hike from nearly 30 dollars two years back to over 110 dollars now has lead to very high inflation in all consuming countries like US , Europe, China and India.

The actual GDP growth of China could have been at least three to four points higher than what has been achieved, but for the steep crude oil price hikes. Similarly the GDP growth of US could have been definitely positive and the sub-prime crisis could have been far less impacting , had the crude prices not gone up by over 100%.