Oil mixed after IEA warning on USD 100 price

Written by: Pti
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Singapore, Jan 19 (AFP) Oil was mixed in Asian tradetoday after the International Energy Agency warned that highcrude prices posed a risk to the global economy.

New York''s main contract, light sweet crude forFebruary delivery, gained five cents to USD 91.43 and BrentNorth Sea crude for March delivery fell 21 cents to USD 97.59.

The IEA in its monthly report yesterday said "recentprice levels already pose a real economic risk -- something ofdeep concern to producers and consumers alike."

Crude prices had rallied to near USD 100 a barrel inrecent trading sessions, fuelled by expectation of strongdemand as the global economic recovery continued.

Oil prices first hit USD 100 in January 2008.

Oil prices of USD 100 a barrel represent a burden offive per cent of gross domestic product on the global economy,the IEA calculated, and said such levels in the past "haveclearly been associated with economic problems."

"Ultimately, oil producers, financial investors andconsumers (notably import-dependent developing countries) allsuffer under such a scenario," the IEA report said.

The IEA, the energy policy and monitoring arm of the34-member Organisation for Economic Cooperation andDevelopment, said growth in oil demand in 2010 was at one ofthe strongest rates in three decades, albeit from a low crisislevel.

Oil demand grew by 3.2 per cent, an increase of 2.7million barrels per day (mbd) year-on-year to 87.7 mbd, itsaid.

Moreover, "such demand strength appears to be morerelated to a buoyant economic recovery than to the frigidweather conditions that prevailed in most of the northernhemisphere in late 2010." (AFP)

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