IEA Predicts Higher Oil Prices
The Agency’s new projection indicates that world oil supplies are tightening, and a further OPEC cut would tighten the market.
Tanaka said that taking more OPEC oil supplies off the market could elevate oil prices, particularly in the second half of this year.
He also expressed worry that OPEC members were cutting back on new oil production projects, in response to lower crude prices, which could make it difficult to meet future world oil demand.
“Our concern is if they spare the supply side investment, the situation could be worse in the future when demand comes back (and) supply cannot increase so easily,” he said.
“It is quite natural when demand is going down that production must adjust. On the other hand, we are urging OPEC to watch carefully the market situation and respond to it properly,” Tanaka said.
Crude oil rose the most in three weeks on speculation that a 9.6 percent drop in prices this week was larger than justified as governments implement stimulus programs.
Oil climbed more than 7 percent as the House of Representatives prepared to vote on a $789 billion plan that is designed to spur economic growth in the world’s biggest energy- consuming country. The spread between the two oil contracts closest to expiration surged to $8.19 yesterday, the biggest since Dec. 19.
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