UPDATE 2-Oil price could strangle economic recovery hopes- IEA

Thu Nov 24, 2011 2:22pm GMT
 

"It is a major risk for the slowdown (of) the economic growth in Asian countries which were the countries which brought us out of the financial crisis in 2008," said Birol, whose organisation represents major energy consuming countries.

"If we don't have their strength this time it will be much more difficult to go out of this financial crisis."

The Organization of the Petroleum Exporting Countries (OPEC) has already signalled it sees no need to release any extra oil to the markets when it meets in December but will probably face increased pressure from consumers as the IEA insists that prices are damaging the economy.

Asked whether the oil-producing bloc should increase production because of the danger to the global economy, Birol said it was up to OPEC.

"I hope that colleagues from the producing countries are also looking at the market indicators carefully, including the diminishing OECD stocks levels and the fragility of the global economic situation and make their decisions by taking into account all of these indicators," he said.

"I think the producing countries also need clients with healthy economies."

TOO LITTLE OIL INVESTMENT?

Relations between OPEC and the IEA hit lows earlier this year when OPEC failed to agree on an increase in oil output and the IEA released stockpiles to compensate for the loss of Libyan oil and to help support flagging economic recovery.   Continued...

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