World economy can live with $100 oil

Jane Merriman and Peg Mackey
Reuters
Thursday November 8, 2007

Oil will breach the $100 barrier, but this will not kill off global economic growth, the head of Germany's Deutsche Bank said at the Reuters Finance Summit.

"I'd bet a lot the $100 will be pushed through," said Josef Ackermann, chairman of Deutsche Bank.

But oil at $100 a barrel would not make much difference to cost pressures on the world economy, although it is psychologically significant, he said.

"From a cost perspective I don't think that ($100 oil) will be a huge difference. It signals that the economy is robust, otherwise we'd see different price levels," he said.

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"The strong euro has somewhat offset the oil price increase."

Oil is at record highs above $96 a barrel, driven by strong demand from China and India, concerns about tightening supplies and a weak dollar, which has sunk to all-time lows against the euro.

Full article here.

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