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IEA sees "strong likelihood" oil prices will remain high
Petroleumworld
PARIS
Petroleumworld.com 09 25 07
A top official with the International Energy Agency warned Monday there was "a strong likelihood" that short- and medium-term oil prices would remain high, citing demand-supply tensions and robust growth in China and India.
"In the very short term, there is a strong likelihood that prices will stay high," Didier Houssin, head of the IEA's oil market unit, told BFM radio.
He cited "very dynamic demand" as well as "a supply situation that is stretched to meet demand as winter approaches."
He also pointed to "the problem of hurricanes in the Gulf of Mexico (where the United States has key oil installations)" that are likely to persist until the end of October.
But he said there would later be opportunities for the Organization of Petroleum Exporting Countries (OPEC) "to put more crude on the market," which could check a price rise.
"The concerns that exist on developments in the world economy would justify an easing in the price of oil," Houssin told the radio.
"Until now the world economy has been able to manage high oil prices thanks to very strong growth momentum. But in a different context, it's not certain that this would be sustainable."
High prices were also expected to linger into the medium term, "the years to come," because of an "increase in demand" in fast-moving emerging market economies such as China and India as well as a supply squeeze brought on by sluggish investment, Houssin said.
He said however the IEA did not foresee prices remaining at their record highs of recent weeks.
On Monday a barrel of Brent North Sea oil was trading at 78.32 dollars a barrel in mid-morning deals in London. On Friday it jumped to a record 79.94 dollars a barrel.
AFP 24 1157 GMT 09 07
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