IEA says oil price hurting economy
Azerbaijan, Baku, April 12 / Trend /
The International Energy Agency (IEA) maintained its outlook for global oil demand in 2011, while warning that prices above $100 a barrel are starting to hurt the global economy, Bloomberg reported.
Worldwide oil consumption will increase by 1.4 million barrels a day, or 1.6 percent, this year to average 89.4 million a day, the Paris-based adviser said today in its monthly Oil Market Report.
Still, preliminary data "already show signs of oil demand slowdown" and global supplies are starting to look "thin" as the Libyan conflict strains spare production capacity held by the Organization of Petroleum Exporting Countries, the IEA said.
"There are real risks that a sustained $100-plus price environment will prove incompatible with the currently expected pace of economic recovery," the agency said. "The surest remedy for high prices may ultimately prove to be high prices themselves."
Crude futures climbed above $110 a barrel in New York for the first time in 30 months on April 7 as forces loyal to Libyan leader Muammar Qaddafi launched strikes on the country's oilfields. Oil traded around $109 today. Yesterday the International Monetary Fund lowered its 2011 forecast for U.S. growth, citing the strain from fuel costs, and Goldman Sachs Group Inc. (GS) said there are "nascent signs of oil demand destruction."