Billionaire forecasts that oil bubble may burst
 04 Jun 2008
A billionaire investor has suggested that the current record oil prices are the result of a 'bubble' caused by speculation and restricted supplies.
George Soros suggests that oil price rises are weighing heavily on the US economy and may be "distinctly harmful" in the long term.
Decreasing crude supplies and rising demand could force America's economy into recession, he warned the Senate committee on commerce.
"The rise in oil prices aggravates the prospects for a recession," Mr Soros told the inquiry into possible manipulation of energy prices by investors.
Oil prices around the world have doubled in the space of just one year and analysts are predicting that they could rise still further during 2008 unless production is increased.
Speculation has pushed up the price of oil in the wake of a weakened US dollar and the recent global credit crunch.
World leaders are urging oil producers' cartel Opec to increase production in order to ease price inflation, while US politicians are exploring the possibility of regulating investment in oil markets.
Meanwhile the head of the Organisation for Economic Co-operation and Development (OECD) has declared that high oil prices are a positive thing as they will curb demand and help to reduce greenhouse gas emissions.
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