13 April 2011 / AP, SINGAPORE
Sky-high oil prices are beginning to dent oil demand growth, the International Energy Agency said on Tuesday, but added prices could ultimately moderate through a global economic slowdown.
Its view echoed a report from the International Monetary Fund on Monday which said that oil prices and inflation were the key risks for to the global recovery. That had contributed to a 3 percent drop in oil prices on Monday, but Brent crude rose a dollar on Tuesday to over $125 a barrel as some analysts said the IEA report was less negative than expected. Few expected OPEC oil producers to formally agree to pump more to bring prices down, the IEA said. “That leaves a less palatable route to price moderation -- namely economic slow-down and weaker demand growth,” it said in its monthly report. “There are real risks however that a sustained, $100 per barrel plus price environment will prove incompatible with the currently expected pace of economic recovery.” The energy advisor to the Organisation for Economic Co-operation and Development (OECD) said data for January and February suggested that high oil prices may have started to dent demand growth. But it kept its 2011 global oil demand growth forecast unchanged at 1.4 million barrels per day or 1.6 percent.
