Weak currency leads to eurozone "oil shock" The eurozone is weathering an "oil shock" of similar proportions to that of mid-2008, when benchmark crude oil prices rose to almost $150 a barrel. True, the cost of Brent in US dollars remains well below the record high of $150 a barrel, hovering at a six-month peak of $120 a barrel. But add into the mix the weak euro against the dollar - far below the levels of three-and-a-half years ago - and the result is that eurozone consumers are paying almost the same price for oil as they did back in 2008. In euros, the cost of Brent rose this week to a three-year high of €91.70 per barrel, less than 2 per cent below the all-time high of €93.50 a barrel set in July 2008. An euro-denominated record high for oil prices could be set next week if the current trends in commodities and currencies continue. In US dollars, meanwhile, crude prices are still about 20 per cent below the all-time high. The eurozone is not alone. The UK - as I am painfully reminded at the pump - is also paying almost record prices for its oil thanks to the exchange rate. Brent rose this week to £76.20 per barrel, above the peak of 2008 and only a fraction below the all-time high set in April last year at the peak of the Libyan civil-war supply disruption of £77.10 per barrel. I would not be surprised if sterling-denominated crude oil prices hit a new record high over the next week or so. The price of oil in euros is weighing down on regional economic growth and demand for refined oil products. Statistics for the energy sector show deep drops in year-on-year consumption in countries such as Italy in January. The International Energy Agency, the western countries" oil watchdog, forecasts that Europe's richest countries would witness the largest drop in oil consumption of any region, contracting by 340,000 barrels a day, following a drop of 290,000 b/d last year. In two years, the region's demand has contracted by an amount larger than the production of Ecuador, the smallest member of the Opec oil cartel. Factoring in the impact of the currency market on oil prices is not only important in understanding the drop in European demand, but also the woes of the refining sector. The profitability of simple refineries, which surged on the back of the closure of several plants this year in the Atlantic basin, has fallen again. The faltering demand will also hit the so-called marketing businesses - petrol stations and wholesale distribution - of regional oil companies, particularly those in southern Europe such as Eni of Italy; Repsol YPF and Cepsa of Spain, Portugal's Galp, and Hellenic Petroleum of Greece.