SHARP increases in the price of oil could risk the economic recovery that is currently under way, according to two local investment experts.

Recent forecasts have suggested that oil could pass the $100-a-barrel mark before the year is out and therefore hit the western economies before they have fully recovered. It currently stands at just under $80-a-barrel.

Spearpoint chief investment officer Kevin Boscher pictured) agrees that the price of oil is going to rise, but believes in many respects it is still difficult to forecast how quickly that will happen, with much depending on how demand from the Bric nations continues to increase and in turn compensate for the fall in demand from the US and Europe.

‘We expect oil prices to continue to rise from now into next year and we wouldn’t be at all surprised to see it above $100 within a couple of years.’

But that is all dependent on how the global recovery continues to play out.

‘The recovery we have got is still pretty shaky. What is happening with Greece has acted as a warning to the fact that the global financial system is still recovering from major surgery so if we were to get a very high oil price too quickly and at a time when major economies are still struggling to recover it would risk pushing them back into recession.

‘But if it goes higher gradually over the next 12-to-18 months and it’s backed up by the recovery getting stronger it is less of a threat.’

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