Oil prices climb amid IEA warning on $100 price

18th January 2011, Comments 0 comments

World oil prices rose slightly on Tuesday as the IEA warned that crude near $100 was posing a real risk to the global economic recovery.

Brent North Sea crude for delivery in March rose 59 cents to $98.02 a barrel in late afternoon London trade.

New York's main contract, light sweet crude for February, added 22 cents to $91.76.

In its latest monthly report, the International Energy Agency said "recent price levels already pose a real economic risk -- something of deep concern to producers and consumers alike."

Oil prices of $100 a barrel represent a burden of five percent of gross domestic product on the global economy, the IEA calculated, and said such levels in the past "have clearly been associated with economic problems.

"Ultimately, oil producers, financial investors and consumers (notably import-dependent developing countries) all suffer under such a scenario," the report said.

Optimism about the global economic recovery and interest from bullish investors have pushed crude prices close to $100 a barrel in recent sessions, levels last seen in October 2008.

A harsh winter in Europe and parts of North America, as well as growth in China and other developing nations has also boosted prices.

"The recent upside momentum is likely to continue in the medium-term amid expectations of strong US earnings results," said Myrto Sokou, an analyst at Sucden Financial brokers in London.

"The US corporate earnings season has started with strong earnings from Alcoa, Intel and JP Morgan that improved market sentiment and spread optimistic signs across the oil markets and other commodity prices," she added.


© 2011 AFP

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