When futures options for crude oil predict that prices will rise to $120/barrel by the end of the year, and industry analysts are looking at prices closer to $101/barrel, it’s tough to know whom to believe.The difference is important because a price of around $120 will snip about 0.5% off global GDP compared with a price of around $100.
The World Bank puts 2010 global GDP at about $63 trillion, and the IMF estimates world GDP growth of 4.3% in 2011. That’s a difference of more than $300 billion. That lost growth goes to pay for more transportation fuel, fertiliser, and other products that use petroleum as a feed stock. Essentially the entire $300 billion is divvied up among oil producing nations and private oil companies.