PARIS, 15 March 2006 — The International Energy Agency (IEA) warned yesterday that robust economic momentum, threats to oil supplies from key producers and rising demand could combine to sustain high oil prices in the next few months. The IEA, in its monthly market report, noted a recent fall in prices from January levels but added: “A look at fundamentals suggests that while there may be some justification for a moderation in prices, the road ahead is far from smooth.” It said crude futures in New York lost an average of $3.61 per barrel in February to reach an average of $61.93.
The agency issued a downward revision to its estimate of global oil demand growth this year, foreseeing an increase of 1.8 percent rather than the 2.1 percent forecast in its February report, in the face of high prices and demand sluggishness in Southeast Asia. Demand growth should come to 1.49 million barrels per day (bpd) in 2006 instead of 1.78 million. But it said the projected figure for 2006 was still far higher than demand growth of 1.02 million bpd in 2005, with China and North American driving the rebound.