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

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

Trade Deal

REUTERS SHOWCASE

Bullish on Equities

Bullish on Equities

Bullish on Indian equities, but gains seen 'less sharp'- Goldman Sachs  Full Article 

Streamlining Operations

Jet Streamlines

Jet Airways chairman says looking to restructure debts, talking to bankers  Full Article 

Political Economy

Political Economy

Analysis - Watch what markets don't do as world politics turns nasty   Full Article 

Photo

Honda's India Thrust

Honda's India unit to account for 25 pct of Asia Pacific sales by March 2017 - exec   Full Article 

Short of Expectations

Short of Expectations

Apple revenue lags Street's view despite strong China growth  Full Article 

 Boosting Output

Boosting Output

NMDC plans to boost iron ore output by two-thirds  Full Article 

Apple Results

Apple Results

Apple margin concerns fade, focus shifts to iPhone launch  Full Article 

Photo

Food Scandal

Five held in China food scandal probe, including head of Shanghai Husi Food   Full Article 

Reuters India Mobile

Reuters India Mobile

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