IEA fears oil price hike

15 October 2009

Crude oil prices could soar over the next few years, unless there is a major increase in exploration and production, according to the International Energy Agency (IEA).

Investment in the oil and gas industry has dropped off considerably over the course of the last 18 months as low fuel prices and economic uncertainty took their toll on producers.

However, with the global economy beginning to show signs of a recovery that could push energy demand higher in the coming months, this underinvestment is a major concern.

The IEA's chief economist Fatih Birol said yesterday (Wednesday October 14th) that the situation could result in a shortage of supply, bringing the risk of major oil price hikes.

The warning could prompt home heating oil customers to stock up on supplies of the domestic fuel now in order to avoid the effects of any future spike in crude values.

Last summer, oil prices reached record highs of more than $147 (€98.41) a barrel, before falling sharply as the recession took hold to less than $33 by the end of 2008.

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