IMF paints grim picture for oil future

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WASHINGTON, May 15 (UPI) -- Incremental increases in global oil production may translate to a doubling of oil prices by the next decade, the International Monetary Fund warns.

The International Energy Agency warned last year that historically high oil prices during the Libyan war could erase upbeat assessments about the potential for global economic recovery.

The International Monetary Fund warns that, despite a modest decline in global oil prices this year, the world economy was headed for "unchartered territory," the Daily Telegraph newspaper in London reports.

"Our prediction of small further increases in world oil production comes at the expense of a near doubling, permanently, of real oil prices over the coming decade," an IMF report states.

IEA Executive Director Maria van der Hoeven said in Australia that concerns from last year were continuing into 2012.

"Prices remain very high," she was quoted as saying."High prices pose a real threat to the economic recovery."

The Organization of Petroleum Exporting Countries, in its May report, said global oil demand stood at around 900,000 barrels per day.

"Given the stabilization of the U.S. economy and the shutdown of Japanese nuclear power plants, world oil demand growth has, at least for the short-term, stopped its declining trend and is showing some growth," the report read.