Global economy shrugs off record cost of crude

The global economy is having to learn to live with stubbornly high oil prices, and so far it has done pretty well - but the long-term outlook is uncertain, according to analysts here.
Since the start of 2006, crude prices have risen by 20.0 percent to strike historic records over the past week, with New York's contract topping 75 dollars for the first time, closing Friday up 1.48 dollars at 75.17 a barrel for light sweet crude for June.
London's Brent North Sea crude also hit a historic high of 74.79 dollars a barrel before settling back to close at 74.57 dollars, up 1.39.
The market has been shaken by rising tensions over Iran's disputed nuclear ambitions, combined with crude output stoppages in Nigeria and weak gasoline or petrol stocks in the United States.
Despite the recent spike in oil prices, the world economy is on course to expand by a robust 4.9 percent this year, according to forecasts from the International Monetary Fund.
"It is amazing," said Investec analyst Bruce Evers, in reference to the resilience of the global economy. "I still don't see where the inflection point is - the point where (oil) prices start to affect demand and growth. Maybe in two months' time we will start to see the impact." Capital Economics analyst Julian Jessop said there was no reason to panic.
"If we had 70.0 dollars per barrel on oil prices in the midst of a recession, I would be very worried, but 70.0 dollars when the world economy is growing at over 4.0 percent is not such a big worry."
Oil prices are about 80.0 percent higher than in January 2005 and more than three times the level of four years ago.
Record oil prices have also seen the price of gold climb above 645.0 dollars per ounce, the highest level for more than 25 years. Gold is seen as a store of value in troubled times.
Analysts warn that crude prices could reach 80.0 dollars should the 2006 Atlantic hurricane season, which runs from June to November, be anything like last year.
In August 2005, Hurricane Katrina battered oil rigs and refineries in the US Gulf of Mexico, sending crude prices to record highs at the time.
And many market watchers predict that 100-dollar oil could become a reality if the United States launches military action against Iran, the world's fourth-biggest crude producer, over its nuclear energy programme.