MercoPress. South Atlantic News Agency

Oil price surge impacts world growth.

Oil workers strike in Nigeria and the latest report from the International Energy Agency, IEA, have helped oil prices break new records this Tuesday according to analysts in New York where Texas light crude was selling at over 54 US dollars the barrel. In London North Sea Brent reached 51,50 US dollars.

The report from Paris based IEA, which advises 26 industrialized countries in energy affairs, indicates that crude demand is growing faster than originally forecasted

However the same report warns that crude high prices have began to decelerate world growth and encourage China to improve energy performance.

According to IEA, crude demand in 2004 experienced the highest jump in 24 years with an increase of 2,71 million barrels per day. But in 2005 demand is forecasted to expand 1,45 million bpd with a total world consumption of 83,85 million bpd.

"Reduction reflects lower growth prospects in 2005 and the impact of crude high prices on demand and the economy overall".

This year the oil price surge was speared by the growing demand from China.

But the surge is having its impact in China: last August demand decelerated to 6% compared to the 12% of July and 25% of the second quarter.

IEA forecasts that Chinese demand expansion in 2005 will drop to 360,000 bpd, equivalent to 5,6%.

China is the world's second crude importer behind United States.

According to the International Monetary Fund, World Economic Outlook, a sustained rise of 5 US dollars per barrel could impact world growth by 0,3%, particularly in those countries where domestic demand is weak and net importers that are already highly indebted.

The world economy is currently growing at an annual 5%, the highest in three decades, mainly because of China and the US performance, but according to IMF will drop next year to 4,3% from an originally estimated 4,6% because of rising oil prices.