PARIS, 19 October 2004 — The high price of oil seems set to last and economic leaders now acknowledge that it is beginning to weigh on the world economy by lowering growth forecasts for next year.

The price of oil spiked to a new record high of $55.22 a barrel in Asia yesterday, after having lingered above the $55 level in New York on Friday as concerns about US heating fuel supplies mounted ahead of winter in the northern hemisphere.

Amid the relentless rise in oil prices, up nearly 70 percent this year, leaders have shifted from references to the mere threat to growth. Now their comments have a hard edge and even include hard figures counting the cost.

Germany’s Bundesbank said yesterday that “continued strong international demand and restricted capacity reserves” appeared to mean that oil prices “will remain high for a long time”. If the central banks seem less anxious than politicians, they are less optimistic than they were in the first half of the year. Jose Manuel Gonzales-Paramo, an executive board member at the European Central Bank, said yesterday that “uncertainty has increased as a result of oil prices and of a few mixed economic signals”.

However, he told the German business daily Handelsblatt: “But I don’t believe so far that we have to alter our forecasts. Recovery is continuing.” As for the United States, Federal Reserve Chairman Alan Greenspan said Friday the US economy was able to weather high energy prices. “The impact of the current surge in oil prices, though noticeable, is likely to prove less consequential to economic growth and inflation than in the 1970s,” Greenspan said.

European Union Economic and Monetary Affairs Commissioner Joaquin Almunia said Friday that hefty oil prices were among “the clouds on the horizon” seen over the 12-state euro zone. Eurozone growth for 2005, officially forecast at 2.3 percent, would probably be revised downward, Almunia said 10 days before the commission was to publish new forecasts.

Also Friday, the Rome-based ISAE institute said high oil prices had forced it to lower its 2005 growth estimate for Italy to 1.8 percent from the 1.9 percent previously forecast.

French Transport Minister Gilles de Robien has estimated that a lasting rise in oil prices could force the government to lower its 2005 growth forecast, currently at 2.5 percent. But Economy Minister Nicolas Sarkozy assured that this basis for the 2005 budget did not need to be changed “for the moment”.

An economist at French bank Credit Agricole, Anne Beaudu, commented: “While the developed economies are less oil-dependent than they were in the 1970s, the impact of the rise in prices has remained more obscured until now because a recovery is under way. As one exits this phase and growth tends to stabilize, the impact will become more evident.