High oil prices threatening global recovery, warns IEA

ADELAIDE: High oil prices are threatening the global economic recovery, the Executive Director of the International Energy Agency Maria van der Hoeven said yesterday.
Prices have eased a little and market fundamentals have improved in recent weeks, but concerns remain due to unplanned supply outages, international political tension over Iran and limited spare production capacity, she said.
"Prices remain very high," van der Hoeven told an industry event in Australia in a video presentation. "High prices pose a real threat to the economic recovery."
The IEA advises 28 industrialized nations on energy policy.
Earlier, Minister of Petroleum and Mineral Resources Ali Al-Naimi said Saudi Arabia wants an oil price of around $100 a barrel and would like to see global inventories rise before demand picks up in the second half of the year.
Oil prices slumped yesterday, with New York crude striking five-month lows, as the dollar strengthened against the euro on mounting worries over Europe's debt crisis, traders said.
New York's main contract West Texas Intermediate crude for delivery in June was down $1.52 at $94.61 a barrel. Earlier Monday it hit $93.65 — the lowest point since mid-December.
Brent North Sea crude for June was down $1.27 at $110.99 a barrel in late London deals having reached a near four-month low of $110.04 earlier yesterday.
Oil futures retreated as the euro tumbled to its lowest point against the dollar since January, as Greek politicians failed again to form a government over the weekend, again throwing into doubt the future of the euro zone.
"We want a price around $100, that's what we want," Al-Naimi told reporters in Australia. "A $100 price is great."
Saudi Arabia is working at bringing Brent crude prices to that level, he added. The Kingdom, OPEC's biggest producer, said it pumped 10.1 million bpd in April, its highest for more than 30 years, as it bid to meet growing demand and curb oil prices.
Prices have stayed high in 2012 due to concern about disruption to global supply from US and European sanctions aimed at hurting Iran's crude export revenues and forcing Tehran to halt its nuclear program.
Al-Naimi said last week that producers were pumping enough to deal with the impact of the sanctions on the oil market.
He reiterated on Sunday that producers were pumping 1.3 million barrels per day (bpd) to 1.5 million bpd above demand, which is helping to build inventory.
"That should give comfort to consumers," he said.
Inventories are at the equivalent of around 58 days of demand, but Saudi Arabia would like to see stockpiles build more ready for the seasonal increase in fuel consumption in the second half of the year, Al-Naimi said.
"It should be a little bit higher, because you are going into the third and fourth quarter, and demand will be higher as usual," he said.