UPDATE 2-$100 Brent will derail economic growth -Tanaka

Mon Oct 31, 2011 4:59am GMT
 

* Sustained $100/bbl oil could hurt as much as record 2008 prices

* Oil priced between $70-$80 just right

* Asian governments need to work together on security (Adds quotes, details)

By Francis Kan

SINGAPORE, Oct 31 (Reuters) - Sustained Brent crude prices over $100 a barrel will cause as much damage to the global economy as the record prices of 2008 which preceded the financial crisis, Nobuo Tanaka, former executive director for the International Energy Agency (IEA), said on Monday.

The burden of high energy costs on growth contributed to the sharp slowdown in the global economy in the wake of the financial crisis in 2008. High prices led to such a sharp slowdown in fuel demand that oil producer group OPEC was forced to make record output cuts.

"If $100 oil continues, it will be as bad as 2008," Tanaka told the Singapore International Energy Week (SIEW) conference.

Brent at over $100 would cut global oil demand by around 1 million barrels per day (bpd) from what fuel consumption would be at a price of $70 to $80 per barrel, Tanaka said. That would slice over 1 percent from the world's total fuel consumption.

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