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IEA’s Tanaka: oil market ‘very well supplied’
EA sees 5 mln bpd saved if fuel subsidies eliminated.
November 15, 2010 12:17 by Reuters
The oil market will have plenty of supply until at least the end of 2011 if OPEC keeps producing at current levels, International Energy Agency Executive Director Nobuo Tanaka said on Monday.
There have been concerns about supply after recent sharp falls in crude and other oil products in floating storage due to robust demand.
“We think if OPEC continues production at the current level, the oil market will be very well supplied towards the end of next year,” Tanaka told Reuters in an interview in Tokyo.
The IEA has revised up its 2010 oil demand growth forecast by 190,000 barrels per day to 2.34 million barrels per day on the back of demand from China as well as the building up of heating oil stocks in Europe ahead of winter. But it said global oil demand will slow in 2011 to 1.19 million bpd.
“There are certain uncertainties about the global economy, so we still maintain the low growth scenario,” Tanaka said.
He added that he thinks that the impact of United States’ latest round of quantitative easing has already been factored into the crude market.
The IEA last week called for eradicating fossil fuel subsidies, which would boost the global economy, environment and energy security.
“There should be a better way for helping poor people rather than undermining the energy markets,” he said.
“We know by phasing out subsidies, yes, it helps reduce demand of the global energy markets by about 5 million barrels per day.”
Fossil fuel subsidies are on course to reach $600 billion by 2015 if no action is taken, he said. The IEA has estimated that such subsidies were $312 billion in 2009.
G20 leaders committed in Pittsburgh in 2009 to phase out, over the medium-term, inefficient fossil fuel subsidies which encourage wasteful consumption.
(Editing by Edwina Gibbs)