The Hindu : Business : Oil prices will moderate

Online edition of India's National Newspaper
Wednesday, Oct 20, 2004

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Oil prices will moderate — OECD

By Our Special Correspondent

NEW DELHI, OCT. 19. Record global crude oil prices are likely to be short term phenomena, according to the Deputy Secretary General of the OECD Richard Hecklinger.

Predicting that these will moderate, he observed that the impact of high prices has not been as devastating as the `oil shock' of the seventies largely due to the lower reliance on hydrocarbons in the world economy.

He felt prices have risen now due to increasing demand from countries like China as well as fears of supply and security. He therefore felt prices should moderate in future.

At the same time, he said the surge in prices had created `a great deal of difficulty' in the global economy, impeding growth and raising inflationary pressures. Technology, he maintained, was the long-term solution to meeting this crisis by development of alternative energy sources and reducing the reliance on hydrocarbons.

Addressing a press conference during the first OECD-India Roundtable, he said as far as the difference in foreign direct investment flows to China and India was concerned, one should see the trends rather than the precise volumes.

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