International Energy Agency sees 5 million barrels per day saved if fuel subsidies are eliminated
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
"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
"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
Fossil fuel subsidies are on course to reach $600bn by
2015 if no action is taken, he said. The IEA has estimated that
such subsidies were $312bn in 2009.
G20 leaders committed in Pittsburgh in 2009 to phase out,
over the medium-term, inefficient fossil fuel subsidies which
encourage wasteful consumption.