Seoul: The recent sharp rebound in oil prices appears to have been driven by speculative bets and is unlikely to be maintained without a recovery in real demand, the IMF’s chief economist said on Wednesday.
“On the oil price, our sense is that some of the recent increase reflects speculation and (we) believe that speculation can affect prices but not for very long,” Olivier Blanchard told reporters on the sidelines of an international conference.
“So we don’t expect oil prices to increase much above $70 (per barrel).”
US crude is trading at around $68 per barrel, more than double a 2009 intraday low of about $32 set in late January. South Korea’s central bank expressed concern this month that rising oil prices were a fresh threat to the domestic economy.
Blanchard also said the International Monetary Fund would probably upgrade its 2009 economic growth forecasts for Asian countries by around 1 percentage point on average, but declined to provide new figures.
The IMF’s existing forecast is for South Korea’s economy to shrink by 4% this year, but the country’s prime minister told Reuters on Tuesdaythat the economy would outperform the government’s projected 2% decline.