PARIS: The International Energy Agency (IEA) warned Thursday that high oil prices threaten global growth and called for increased output to tackle the problem. The IEA said that despite a recent 10-percent fall, oil prices remained high because of strong demand and geopolitical uncertainty — a reference to popular unrest in the Middle East. The IEA, the energy monitoring and strategy arm of the developed economies, said higher oil prices were “affecting the economic recovery by widening global imbalances, reducing household and business income, and placing upward pressure on inflation and interest rates.” The IEA governing board said: “As global demand for oil increases seasonally from May to August, there is a clear, urgent need for additional supplies ... to prevent a further tightening of the market.” It said in a statement that further 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.” Oil importing developing countries could be “seriously affected by high oil prices, undermining their economic and social well-being,” it noted. The IEA “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.” Oil prices were little changed Thursday, with New York light sweet crude for June delivery off 26 cents at $99.84 a barrel, steadying after the recent sharp correction across the commodities market.
