Oil chiefs tell Davos soaring price could hit global recovery

European oil prices touched almost $100 a barrel earlier this week and yesterday were back around $98 a barrel.

Speaking at the World Economic Forum in the Swiss town, Royal Dutch Shell chief executive Peter Voser said: "We are concerned about the current price of oil, we don't want recovery slowed."

Similar fears were raised by BP's chairman Carl-Henric Svanberg, who said oil in the $65-90 range was "OK", but "if the price continues to rise this could hurt recovery."

The oil majors agreed there were signs of growing global demand, especially from Asia and emerging markets. Svanberg said: "The world is in a good growth mood."

Officials from Opec, the oil producing states, have also expressed their fear of a repetition of 2008 when oil spiked to over $147 as the United Stated slipped into recession.

But the organisation said recent price rises were caused by speculation, not a lack of output.

In comments likely to reinforce expectations that the producer group is disinclined to step up production for now, Opec secretary-general Abdullah al-Badri said the group was producing 29.3 million barrels per day and he was "100 per cent sure" there was no shortage in the oil market.

Badri said the near-record price difference of $12 a barrel between US oil and European Brent showed futures had become "disconnected" from the physical market.

He said both types of crude represented a "diminishing market" and were not representative of the real price.

Also at Davos yesterday, Prime Minister David Cameron described 2011 as a "make or break year" for economic recovery.

The recovery was "always going to be choppy" but Britain needs to "stick to the course" if it wants to come through the recession, he said.

In a speech to some of the world's most powerful business leaders and politicians, Cameron said there must be a "genuine single market" in Europe, while calling for deregulation to promote growth and calling for tighter stress tests for banks.European Union have been trying to draw a line the bloc's debt crisis at Davos, with officials yesterday said to be considering extending bailout loans to Greece and Ireland to 30 years

Sources said Axel Weber, head of Germany's influential Bundesbank, had suggested stretching out the loans from three years for Greece and seven for Ireland as part of a comprehensive package to overcome the crisis.

US treasury secretary Timothy Geithner said yesterday that confidence in the US economy was growing, but warned that unemployment would rise further.

His statement was backed by strong GDP figures from the US yesterday, but Geithner said there was a growing recognition that the United States' fiscal position was "unsustainable," and there was increasing political will to put it back on track.