Give us more oil or risk derailing recovery says IEA

The International Energy Agency, a watchdog organisation of oil-importing countries, called for the release of more oil supplies for the first time since prices have reached two and a half year highs.

The International Energy Agency, a watchdog organisation of oil-importing countries, called for the release of more oil supplies for the first time since prices have reached two and a half year highs. REUTERS/Mukesh GuptaShow less

The watchdog organisation for oil consuming nations called for the release of more crude supplies to prevent a reversal of the global economic recovery.

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It was the first time the International Energy Agency (IEA), which represents the interests of 28 importing countries, has urged for more supplies to be released since oil prices have climbed to their highest levels in two and a half years. Opec is due to meet to discuss production on June 8.

"As global demand for oil increases seasonally from May to August, there is a clear, urgent need for additional supplies on a more competitive basis to be made available to refiners to prevent a further tightening of the market," the IEA's governing board said in today's statement.

"Additional increases in prices at this stage of the economic cycle risk derailing the global economic recovery and are neither in the interest of producing nor of consuming countries."

Brent crude, the European benchmark, was trading today at US$112.55 a barrel. It had surged to more than $125 on the back of the conflict in Libya and the nuclear accident in Japan.

The steady rise in prices since September is "widening global imbalances, reducing household and business income, and placing upward pressure on inflation and interest rates."

"The Governing Board urges action from producers that will help avoid the negative global economic consequences which a further sharp market tightening could cause, and welcomes commitments to increase supply," the statement continued.