IEA: Refiners Need More Crude
The Governing Board of the Paris-based International Energy Agency (IEA) on Thursday called on oil-producing countries to make crude more widely available to refiners.
"As global demand for oil increases seasonally from May to August, there is a clear, urgent need for additional supplies on a more competitive basis to be made available to refiners to prevent a further tightening of the market," the board declared in a written statement. The IEA advocates for energy supply stability on behalf of the world's developed economies, which make up the Organisation for Economic Co-operation and Development (OECD).
The board, which held its regular quarterly meeting this week, observed that oil prices have stood at "elevated levels" despite a correction of nearly 10 percent since May 5. According to the board, "market fundamentals, geopolitical uncertainty, and future expectations" are keeping prices at these higher levels.
Also, the board voiced "serious concern" that the oil price rise since last September is derailing the economic recovery. Widened global imbalances, reduced household and business income, and upward pressure on inflation and interest rates are all effects of higher oil prices, the governing body explained.
"The Governing Board urges action from producers that will help avoid the negative global economic consequences which a further sharp market tightening could cause, and welcomes commitments to increase supply," concluded the IEA board. "We stand ready to work with producers as well as non-member consumers; in this constructive spirit, we are prepared to consider using all tools that are at the disposal of IEA member countries."