Oil prices remain a threat to the fragile global economic recovery despite a recent fall, the International Energy Agency's chief economist told news agency Reuters in an interview last week, adding that the IEA remained ready to release emergency oil stocks if needed.
North Sea Brent crude oil reached a peak of more than $128 in March before declining around $15 gradually over the last two months as tensions in the Middle East have eased and oil supplies have increased.
"Even current prices are far too high for the current economic context... and pose a serious risk," the IEA's chief economist Fatih Birol told the 2012 Reuters Global Energy & Environment Summit. "Economic recovery was especially at stake in Europe, the U.S., Japan and China" he added. "I'm concerned for Europe and I'm also very concerned that these high prices would hit the still hesitant and slow US economic recovery."
• The G8 summit due to start today, 18 May at Camp David, the US president's retreat and international venue, will be overshadowed by the Euro zone crisis but at the request of UK prime minister David Cameron Barack Obama and other world leaders will hold talks about tapping into emergency oil reserves.
The position has changed somewhat since last week when the European Commission was in close contact with the United States and the International Energy Agency (IEA) but saw no immediate need for any immediate release of oil stocks according to the EU's Energy commissioner Guenther Oettinger. But he added "We have a pragmatic approach if there is any need to organise volumes coming out from our stocks, we can activate (them) in a few days. We are thinking about this.".
Oil markets have been on alert for a possible release from strategic reserves after news in March that the United States had held talks with the British and French governments on the issue. In an election year, the U.S. administration is anxious to bring down gasoline prices as the summer driving season loom.
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