The IEA has urged oil-producing companies to ramp up production to avoid derailing economic recovery
The International Energy Agency
(IEA) recently urged oil-producing countries to ramp up supply to avoid ‘derailing the economic recovery.’
By reducing spending power and increasing inflation, oil prices are threatening global recovery by putting significant upward pressure on interest rates.
A statement from the organisation says it may release emergency stockpiles should oil-producing countries not take decision action.
The Organization of the Petroleum Exporting Countries
(Opec) will meet in three weeks to co-ordinate future production, no doubt with an eye on how best to promote economic recovery.
"The Governing Board urges action from producers that will help avoid the negative global economic consequences which a further sharp market tightening could cause, and welcomes commitments to increase supply," the IEA said after a governing board meeting on Thursday.
"The IEA Governing Board expressed serious concern that there are growing signs that the rise in oil prices since September is affecting the economic recovery" the IEA statement said.
IEA’s statement comes a day after news that Iranian president Mahmoud Ahmadinejad will attend Opec’s meeting in Vienna.
As Opec’s second largest oil producer, with 10 percent of world reserves, Iran’s position on the global economic recovery will be important. The country currenty holds the Opec presidency.