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Are rising oil prices a danger to the global recovery?

Professor Tamvakis says high oil prices are not a disaster, yet

With oil prices climbing near the $100 a barrel mark, does it spell disaster for the global economic recovery? In this week's Cass Talks, Michael Tamvakis, Professor of Commodity Economics and Finance, reveals what forces are driving oil prices, predicts how high they will go and explains why triple digit prices are not necessarily bad for consumers or businesses.

The resurgence of the Chinese and Indian economies, as well as supply problems in the North Sea and Alaska are to blame for the recent increases, according to Professor Tamvakis. He claims that prices could continue to rise into the summer - soaring to as much as $200 a barrel - as they are driven on by investment banks and hedge fund players betting on oil as an asset class.

But he insists it is the average price of oil over the course of a year that really matters. The world has already shown it can absorb prices of $147, and while $200 would be disastrous for the world's economy, prices of up to $120 dollars aren't necessarily bad news as they encourage research into greener technologies. Ultimately, he believes OPEC will react to sustained oil price rises by turning on the taps to increase supply.

The Cass Talks interviews are an opportunity to hear Cass faculty and prominent alumni give their perspective on current business and finance news stories, global issues affecting the business world and new research coming out of the School. Listen, watch and download Cass Talks and see other Cass academics share their opinions at:

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