This week, Fatih Birol, chief economist at the International Energy Agency, which represents 28 countries, said oil import costs are rising too fast, climbing to $799 billion by the end of 2010, up by $200 billion.
"The oil import bills are becoming a threat to the economic recovery," Birol said.
February contract crude oil on the New York Mercantile Exchange rose 6 percent in December to around $90 per barrel.
There is a standard operating procedure in oil pricing, which is to pressure the Organization of Oil Exporting Countries to raise production so they do not bankrupt their customers. Birol warned oil importers to slow down their consumption, but that is considered a taller and slower order to fill.
OPEC does not need a warning that the health of the global economic recovery is in its hands. A reminder doesn't hurt, but the organization is well aware that price-fixing is what it does and that oil is a fundamental component for prices across the board. The problem, in part, is that OPEC controls 40 percent of the world's output, not 100 percent. As such, it is the gatekeeper of price but not the only beneficiary in the oil business.
Economists and policymakers don't usually turn to farmers when food prices rise and tell them to raise more wheat, apples, rice and corn. Food production is not quite like telling OPEC to turn up the tap.
There is more carrot than stick, pardon the expression, used to fight food-price inflation because it is assumed if prices are high for wheat, for example, farmers will willingly plant more.
For democratic countries, that is a slow process, putting policymakers in the position of manipulating oil or fertilizer or even land prices, if possible, to help farmers with a major expense, creating more profitable wheat. Farmers quickly understand that.
The United Nations Food and Agriculture Organization said its monthly food price index reached a record high in December, climbing 4.3 percent to 214.7.
The global index showed cereal prices up 6.4 percent in December from November and sugar up 6.7 percent, The New York Times reported.
Over the year, corn and wheat futures have risen 49 percent and soybeans are up 33 percent.
In international markets Thursday, the Nikkei 225 index in Japan added 1.44 percent and the Shanghai composite index in China fell 0.51 percent. The Hang Seng index in Hong Kong was flat, up 0.12 percent and the Sensex in India dropped 0.57 percent.
The S&P/ASX 200 in Australia rose 0.21 percent.
In midday trading in Europe, the FTSE 100 index gained 0.5 percent and while the DAX 30 in Germany lost 0.51 percent. The CAC 40 in France shed 0.29 percent and the Stoxx Europe 600 rose 0.72 percent.
Don't panic, stocks will rebound