World at Risk of ‘Significantly Higher’ Oil Price, IEA Says

The world is at risk of “significantly higher” oil prices unless Middle East countries invest more in production, according to the chief economist for the International Energy Agency.

“Less oil than today would not be helpful,” the IEA’s Fatih Birol said in a Bloomberg Television interview today in Singapore.

Birol was asked what the Organization of Petroleum Exporting Countries might decide about output when it meets today in Vienna. “Given the market condition we have and the very fragile economic recovery, any production lower than today’s level will not be good news,” Birol said at an IEA presentation in Singapore.

Forecasts that global demand will increase by 1.3 million barrel a day in 2012, “disappointing” output from non-OPEC suppliers and falling oil inventories in developed economies are holding up oil prices, Birol said.

He also commented on sanctions against Iran. “In general, loss of oil from any exporter is not good news. But in terms of Iran, I do not know whether or not the sanctions will lead to a loss of oil.”

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