RTRS:COLUMN-High oil prices are good for you: Clyde Russell
--Clyde Russell is a Reuters market analyst. The views expressed are his own.--
By Clyde Russell
SINGAPORE, June 9 (Reuters) - There is an almost universal assumption among consumers that high oil prices are a bad thing, but the current crude cost of around $100 a barrel is likely to prevent prices from jumping significantly in the coming years.
The failure of the Organisation of Petroleum Exporting Countries to agree on raising output quotas showed that the group has difficulty in putting a ceiling on prices.
No need to worry though, the market will limit gains as ultimately if prices do get too high, the Western world will tip back into recession, thus lowering them again.
What you really want is a Goldilocks situation, where prices are high enough to spur the development of new sources of crude, as well as alternative fuels such as biodiesel, electric cars and natural-gas powered vehicles.
But they mustn't get too high to choke the already fragile economies in the developed world.
Low oil prices, which in the current environment would be anything below $70 a barrel for West Texas Intermediate, only serve to drive up demand and lower the incentive to look for new sources of supply