A gasoline tanker truck driver transfers gasoline into an underground tank at a 76 gas station in San Anselmo, California. (Justin Sullivan/Getty Images)
Oil futures, boosted by perceptions the economy is recovering, surged to a new 2009 peak above $75 a barrel on Wednesday—a level IEA Chief Economist Fatih Birol called "unjustifiably high" in an interview with Reuters.
"The rapid hike of the price is certainly a concern," IEA Executive Director Nobuo Tanaka told reporters on the sidelines of the agency's biennial ministerial meeting in Paris, also attended by Birol and U.S. Secretary of Energy Steven Chu.
"If the oil price moves too fast, the economic recovery may be hampered," Tanaka later told Reuters Television, adding that the agency, which advises 28 industrialised economies, also had concerns about supply capacity following delays in or cancellation of investments in oil exploration and production.
The IEA and OPEC have both increased their forecast for global oil demand in 2010.
"When the economy starts recovering we may have a shortage on the supply side and that may create a price spike. That is a major concern," Tanaka said.
Birol said investments in the oil industry remained down 20 percent compared with 2008, adding he had seen no "noteworthy progress" on this front over the summer.
The United States also voiced concern about the impact of volatile oil prices.
"Spiking prices in oil and gas are very counter-productive because they can set off recessions ... What we want are stable prices in oil and gas," Chu told reporters, adding a jump in oil did not necessarily foster the development of cleaner energies.
"The renewables can be encouraged in a number of ways but to wish that certain fossil fuels prices jump up is, I think, not correct," Chu added on the sidelines of the IEA meeting.
Optimism on Copenhagen
Chu and Tanaka both reiterated their hopes that December's United Nations meeting in Copenhagen, which aims to agree a new pact on fighting climate change to succeed the Kyoto Protocol, would be successful."We are working towards this. I remain hopeful," Chu said.
Tanaka said the economic crisis provided a window of opportunity to reach a deal in Copenhagen.
"Luckily, the slowdown of economic activity created a drop in CO2 (carbon dioxide) emissions which is the first time since World War Two... So we are cautiously optimistic (for the summit's outcome)."
Birol said demand for fossil fuels should peak by 2020 provided an agreement could be reached in Copenhagen on a target to stabilise the concentration of greenhouse gases in the atmosphere at 450 parts per million of CO2 equivalent.
Negotiators from developed countries and emerging nations have been wrestling over the sharing out of the burden of curbs on greenhouse gas emissions.
Another thorny point is whether to extend the Kyoto Protocol into a second commitment period from 2013, amend the pact, or create a new one, a step many developing states resist.
Kyoto obliges rich countries to make quantified commitments to cut emissions of greenhouse gases that are stoking global warming, while developing countries do not have to assume quantified emissions targets.
China, as both the world's biggest developing country and the world's biggest emitter of greenhouse gases from human activity, is at the heart of the disagreements.
