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It
was just about 30 years ago that oil prices began climbing,
sometimes steeply, and at times not so steeply - from US$3
per barrel in 1972, to US$10 per barrel in 1974, and to US$25
per barrel in 1980. On each occasion, hands were thrown up
in horror, and prognostications of gloom and doom for economies
abounded.
Since
1980, oil prices have risen and fallen, the rising occurring
more than the falling; and since 2003, there has been a relentless
rise. During May 2006, the price of oil even went beyond $70
a barrel at the New York Mercantile Exchange (NYMEX).
But
shocked reactions are scarce these days. Only the worthies
of international economics and finance, ranging from central
bank governors to officials of IMF or World Bank talk of slowdowns
in national growth rates or rise in inflation or unemployment.
Going by earlier prognostications, a 20-fold price increase
of a crucial raw material would have been expected to play
havoc with economies that were believed to be so sorely dependent
on oil for growth. Nothing of that sort has happened, and
oil prices are not screaming headlines any longer. The
world is coming to have a more realistic understanding of
oil's place in the world economy. The world has come to realize
that oil prices are really quite low, and even steep increases
in the prices can be taken in stride. |
