ROME (Thomson Financial) - Oil prices at their current level are too high for everyone, the head of the International Energy Agency (IEA), Nobuo Tanaka, said on Monday. At the same time, output from oil producing countries is sufficient, Tanaka added.
"The IEA's view is that the prices are too high for everybody, especially for developing countries," Tanaka told journalists on the sidelines of the International Energy Forum here.
At the same time, "the current level of production is enough and sufficient," he added.
No single factor was to blame for the surge in oil prices and there is no short term solution to bring down the record level, Tanaka said.
"Lots of elements are behind it," he said.
"Of course, fundamentals are a key element. But it's not only that. There are other elements, such as the weaker dollar, speculation, weather, etc. All these elements are behind the current price rise. There's no single element we can identify."
The IEA recently estimated that world oil demand would slow by an average 300,000 barrels per day this year, largely as a result of the economic slowdown in the U.S.
Indeed, demand from industrialised countries overall was slowing. However, in "other parts of the world, notably China, India, the Middle East, there is no evidence of such a slowdown," Tanaka said.
If oil-producing countries were to maintain their current level of production, inventories would be replenished "and that will lead to better-balanced fundamentals, assuming there are no unforeseen geopolitical events, leakages, accidents, hazardous weather or port strikes," Tanaka said.
"We don't know if the inventory build-up will continue. We think the current level of production is enough and sufficient. Having said that, producer countries can also send a message to the market" on the investment issue, Tanaka suggested.
"Spare capacity is very low. Increased capacity would be very helpful," he said.
jan.harvey@thomsonreuters.com
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