Thursday 19 May 2011

High oil prices affecting global recovery

The International Energy Association is concerned that high oil prices are risking the global economic recovery.

At the IEA Governing Board's quarterly meeting, members concluded that: "Despite a near-10% correction since 5 May, oil prices remain at elevated levels driven by market fundamentals, geopolitical uncertainty and future expectations."

The statement from the meeting also noted the Board's "serious concern that there are growing signs that the rise in oil prices since September is affecting the economic recovery".

Members worried that price increases could reduce household and business income and adversely affect inflation and interest rates.

The Board welcomed commitments from producers to increase supply and urged that increasing communication between oil producing companies and consumers was the solution.