INTERVIEW - Oil price over $70-80 risky for recovery - IEA

ISTANBUL Wed Dec 9, 2009 7:49pm IST

A customer fuels her car with unleaded petrol at a Morrisons supermarket in Coalville, central England, in this October 2008 file photo. REUTERS/Darren Staples

A customer fuels her car with unleaded petrol at a Morrisons supermarket in Coalville, central England, in this October 2008 file photo.

Credit: Reuters/Darren Staples

Related Topics

Priyanka Gandhi Vadra, daughter of Congress party chief Sonia Gandhi, adjusts her flower garlands as she campaigns for her mother during an election meeting at Rae Bareli in Uttar Pradesh April 22, 2014. REUTERS/Pawan Kumar

Election 2014

More than 814 million people — a number larger than the population of Europe — are eligible to vote in the world’s biggest democratic exercise.  Full Coverage 

ISTANBUL (Reuters) - Oil prices above $70-80 a barrel could be risky for global economic recovery, the chief economist of the International Energy Agency said on Wednesday.

Birol told Reuters in an interview that current oil price levels were good for investment.

Oil prices have more than doubled from the lows near $30 a barrel at the end of 2008 to around $75 a barrel as investors eye signs of wider economic recovery which could boost oil demand. Oil was trading at $73.79 at 1045 GMT.

"Price levels we see today betwen $70-80 dollars is a good price level for almost all investment," said Fatih Birol, chief economist of the IEA, which advises 28 industrialised countries.

"But if the prices would go higher than this, it would be risky for the global economic recovery," he said.

He also said that demand could rise in 2010 given global signals for a possible economic recovery, but that demand would depend on the rate of recovery.

"How fast and how much demand will increase will almost be entirely up to what the economic recovery will look like. But if we were to believe a few recent signals ... we may see a rise in demand," he said, without quantifying the increase or giving a time frame.

He said he was looking at demand coming from China and saw recent U.S. employment data that show employers cutting fewer jobs than expected as positive for consumption.

Birol also said that he saw an easing of political risk revolving around disputes between Russia and Ukraine that left natural gas consumers in eastern Europe in the cold last year.

Ukraine-Russia ties hit a low point last January and millions of people in southern Europe were left without heating after Russia halted gas deliveries to Ukraine for two weeks in a price dispute before a deal was brokered.

Birol also said that lower natural gas consumption in Europe over the next several years would increase competition among major natural gas pipeline going to Europe such as the Russian-backed South Stream and the European Union-backed Nabucco pipeline, each seen worth billions of dollars.

(For more news on Reuters Money visit www.reutersmoney.in)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Oil Imports

Oil Imports

India to make May-July oil payments to Iran - sources.  Full Article 

DLF Shares

DLF Shares

DLF slides 3 percent, underperforms rivals.  Full Article 

Global Economy

Global Economy

Chinese factories stalling as euro zone business picks up  Full Article 

Rupee Falls

Rupee Falls

Rupee falls for third day; foreign fund inflows key.  Full Article 

Record High

Record High

BSE Sensex hits record high for third straight day.  Full Article 

M&M Upgraded

M&M Upgraded

Credit Suisse upgrades Mahindra & Mahindra to 'outperform'  Full Article 

Breakingviews

Breakingviews

Manchester United’s crisis has silver lining  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage