IEA Warns Of High Oil Prices

High oil prices are threatening the global economic recovery, according to the executive director of the International Energy Agency Maria van der Hoeven.

Prices have eased a little and market fundamentals have improved in recent weeks, but concerns remain due to unplanned supply outages, international political tension over Iran and limited spare production capacity, she said.

“Prices remain very high,” van der Hoeven said at an industry event in Australia on Monday. “High prices pose a real threat to the economic recovery.”

Despite the high prices oil supply has grown. The Organisation of the Petroleum Exporting Countries (OPEC) said its own production had risen in April to 31.62 million barrels per day (bpd) as Iraq ramped up production and Libya’s oil industry recovered.

“Higher OPEC crude oil production underscores the current trend of plentiful supply in excess of market requirements,” OPEC said in its monthly Oil Market Report.

OPEC also said that the decline in world oil demand growth had stopped, at least for the short-term, as the US economy stabilises and non-OPEC demand continues to grow, according to Reuters.

It said world oil demand would grow by 900,000 bpd in 2012, up 40,000 bpd from its previous assessment in April.