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ROME: High oil prices could tip the world economy
into recession, the International Energy Agency (IEA) warned on
Tuesday.
“That’s possible,” IEA
executive director Nobuo Tanaka said on the sidelines of the
International Energy Forum here.
The previous day, the IEA chief
told the three-day gathering of oil producers and consumers that oil
prices, at their current levels, were “too high for everyone,
especially for developing countries who face other significant costs
increases,” namely food prices.
The IEA represents the interests
of the oil-consuming countries.
World oil prices eased only
slightly in Asian trade on Tuesday after once again spiking to a
record high of $117.56 the day before amid reports of pipeline
sabotage in Nigeria and the refusal on the part of the Organization
of Petroleum Exporting Countries to raise output for the time being.
Nevertheless, the IEA chief told
AFP that he believed the oil market would become “more balanced”
in the short term as stocks were replenished.
Tanaka had already said the day
before that the IEA was projecting world oil demand to slow this
year, not least because of the economic slowdown in the United
States. And with OPEC projected to hold output steady, that would
enable stockpiles to be built up again.
In the longer term, however, the
IEA “wants to see more stockpiles and more spare capacity,”
because “low investment and low spare capacity are making the
market very volatile,” Tanaka said.
--AFP
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