World
Institutional
links
Welcome back on
26 -29 August,
ONS 2008
Bridging
the energy gap
is ONS 2006 theme,
from 22-25 August,
in Stavanger, Norway
Petroleumworld
Business
Partners:
Centre for
Global Energy
Studies
  |
IEA blames falling stocks for high oil prices
PARIS
Petroleumworld.com 10 12 07The International Energy Agency, the developed world's energy watchdog, on Thursday blamed falling global stock levels for high crude oil prices.
"Stocks are clearly tighter than they have been for some time, but what is driving market expectations and therefore prices is the lack of confidence that they will be replenished," the IEA said in its monthly report on the oil market.
World oil prices climbed on Thursday in European trade to around 80 dollars per barrel ahead of US government data expected later in the day which is forecast to to show a further drop in stockpiles.
"There's complete consensus over the market that stocks will draw (fall) in the fourth quarter," said IEA chief analyst Lawrence Eagles.
The Paris-based organisation held its forecasts for oil demand steady, saying it was waiting for new assessments of the global economy in light of recent turmoil on global financial markets.
It predicted average demand to be 85.9 million barrels per day (bpd) in 2007 and 88 million bpd in 2008.
The International Monetary Fund and the Organisation for Economic Cooperation and Development are soon to give updated estimates on the health of the global economy.
Recent turmoil in global financial markets and weakness in the US housing market has raised uncertainty about the outlook for growth.
"In August the situation looked very bad, but then there were interest rate cuts (in the US) and injections of liquidity by central banks, which tend to give confidence," said Eagles.
The IMF is to publish its latest projections next week.
World oil supply increased by 415,000 bpd in September from August owing to higher output in North America, China and from OPEC members, averaging 85.1 million bpd, the watchdog said.
The IEA said that the persistence of high crude prices was leading to substitution away from oil into other energy sources.
"There has been lot of substitution towards natural gas in recent months and that is a relative price effect," said Eagles, explaining that this was a reaction to recent record crude prices above 80 dollars per barrel and the relatively low price of natural gas.
Story by AFP 11 1111 GMT 10 07
Copyright© 2007 Petroleumworld. All rights reserved.
Your
feedback is important to us!
We invite all our readers to share with us
their views and comments about this article.
Write to editor@petroleumworld.com
Any
question or suggestions, please write to:
editor@petroleumworld.com
Best
Viewed with IE
5.01+
Windows
NT 4.0, '95, '98 and ME +/ 800x600 pixels