• Sunday, May 26, 2024
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Oil price fall shows market sufficiently supplied –IEA

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 The fall in oil prices from this year’s high since mid-February shows that the market is sufficiently supplied, said Maria van der Hoeven, executive director of the International Energy Agency, adding that the slide may help the global economy.

Reuters report showed Brent crude sank below $100 a barrel on Tuesday for the first time in nine months after data from China and the United States weakened the outlook for demand. The benchmark has mostly held above $100 a barrel since 2011 on supply worries that started with the civil unrest in Libya and then were boosted by escalating tensions over Iran’s nuclear programme.

Policymakers worldwide have worried that high energy costs threaten to derail the nascent recovery in the global economy from the financial crisis. Brent crude is now down about 16 percent from the year’s high at $119.17, hit on February 8.

“I really do hope that this will help … because as we all know high oil prices have an impact on economic recovery,” Van der Hoeven told Reuters. “I think it also shows what we said more than once that there is no supply problem.”

The International Energy Agency trimmed its estimate for global growth in oil demand in 2013, the third of the world’s top oil forecasters last week to predict weaker consumption.

The Paris-based IEA, which advises 28 industrialised countries on energy policy, expects world oil use to rise by 795,000 barrels per day (bpd) this year, or 25,000 bpd less than it previously thought.