World Oil Market Highly Vulnerable: IMF

The International Monetary Fund said on Wednesday that the world oil market remains highly vulnerable to shocks with significant long term, and the ensuing higher oil prices are breaking global economic growth.

In its semi-annual World Economic Outlook released before the joint spring meeting of the IMF and the World Bank, the IMF said that, generally a 5-dollar-a-barrel increase of oil prices is expected to trim off global GDP growth by up to 0.3 percentage point, although the impact over the last year has been less than feared.

The WEO warned that the impact of further sharp increases in oil prices could be more marked, especially if they were to adversely affect confidence or inflationary expectations. There would also be a greater danger of negative supply-side effects in the long run.

Higher oil prices also pose particular risks for less advanced industrial countries, some heavily indebted emerging markets and many poor countries, the report said.