REUTERS / AP
The head of the International Energy Agency, or IEA, said Monday the Organization of Petroleum Exporting Countries should be "alarmed" by current crude oil prices, and oil producers must be "flexible" with their decisions on output in coming months, as crude prices nearing $100 a barrel threaten to hamper global economic recovery.
"The current price level is alarming, OPEC must continue to be alarmed about the future," Nobua Tanaka told Zawya Dow Jones on the sidelines of a renewable energy summit in Abu Dhabi, the United Arab Emirates' capital.
"The producer countries must be flexible with their decisions in the coming months and watch carefully the market's fundamentals," Tanaka said.
OPEC Secretary General Abdalla Salem El Badri told Austrian financial daily Wirtschaftsblatt Monday that the cartel considers the oil market well supplied and believes the recent price surge is driven by speculation and production disruptions rather than higher demand.
"OPEC won't intervene because of speculators," El Badri said, according to the paper. "For a start, we need to wait and see what the trend will be, but we are observing the market, and OPEC will intervene to stabilize the market if it's out of balance."
OPEC last met in Quito, Ecuador, in December and chose to leave the group's official production quotas unchanged. The producer group is scheduled to meet again in the Austrian capital Vienna on June 2.
The IEA's Tanaka said in Abu Dhabi that the oil market looked like it is tightening.
"We think the market is potentially getting tighter," he said. The oil market was "very tight" towards the end of 2010 as demand temporarily increased, Tanaka added.
"If economic recovery is getting robust in OECD countries, while having good growth in emerging countries like China and India, we may see, let's say, the upside risk of the price," he said.