UPDATE 1-Oil price fall shows market sufficiently supplied -IEA

Wed Apr 17, 2013 3:19am EDT

(Adds comments)

NEW DELHI, April 17 (Reuters) - The fall in oil prices from this year's high since mid-February shows that the market is sufficiently supplied, said Maria van der Hoeven, executive director of the International Energy Agency, adding that the slide may help the global economy.

Brent crude sank below $100 a barrel on Tuesday for the first time in nine months after data from China and the United States weakened the outlook for demand. The benchmark has mostly held above $100 a barrel since 2011 on supply worries that started with the civil unrest in Libya and then were boosted by escalating tensions over Iran's nuclear programme.

Policymakers worldwide have worried that high energy costs threaten to derail the nascent recovery in the global economy from the financial crisis. Brent crude is now down about 16 percent from the year's high at $119.17, hit on Feb. 8.

"I really do hope that this will help ... because as we all know high oil prices have an impact on economic recovery," Van der Hoeven told Reuters. "I think it also shows what we said more than once that there is no supply problem."

The International Energy Agency trimmed its estimate for global growth in oil demand in 2013, the third of the world's top oil forecasters last week to predict weaker consumption.

The Paris-based IEA, which advises 28 industrialised countries on energy policy, expects world oil use to rise by 795,000 barrels per day (bpd) this year, or 25,000 bpd less than it previously thought.

Disappointing economic growth in the United States and several developing economies as well as deep recession in parts of Europe have eroded demand for fuel at a time when oil output has been increasing quickly, particularly in North America.

The U.S. government's Energy Information Administration and the Organization of the Petroleum Exporting Countries last week also lowered their forecasts for 2013 oil demand growth.

"Energy prices in particular, when they are too high, they have an impact on economic growth and the economic recovery," van der Hoeven said.

Data from China, the world's second-largest oil consumer, showed economic growth had unexpectedly slowed in the first three months of 2013. (Reporting by Nidhi Verma and Jo Winterbottom; Writing by Manash Goswami; Editing by Ed Davies and Tom Hogue)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.