NEW YORK, (Aug. 20, 2004) — Fears that skyrocketing oil prices could damage U.S. and world economies intensified this morning as crude oil moved just under $50 US a barrel for the first time.

U.S. light crude set a record $49.33 a barrel, up 63 cents and has risen $12 a barrel, or 33 per cent since the end of June, news agencies are reporting. That’s the highest since crude futures began trading in New York in 1983.

Economists are predicting that if the price hovers over $50 a barrel for three to six months, it would push the U.S. back into recession. There are even whispers that prices could reach as high as $60 a barrel.

Prices are expected to continue rising as clashes in southern Iraq and threats on oil infrastructure could disrupt supplies. There are also doubts over how much extra crude could be pumped anytime in the near future to ease the price surge.

However, adjusting for inflation, the price of oil remains roughly $8 less per barrel less than it was leading up to the first Gulf War, and even farther below a 1981 peak, when the level was equivalent to more than $72 a barrel in today’s dollars, Associated Press reports.

— from Associated Press