IEA: no likely relief from oil prices

The International Energy Agency warned Tuesday that there is unlikely to be much relief from current high oil prices because of brisk demand in China and other emerging markets.

While record prices above $100 per barrel may chip away at oil consumption in the United States and other developed countries, emerging markets are not slackening, the Paris-based agency said in its monthly report.


The IEA revised downward its predictions for 2008 crude consumption in the U.S., Europe and other developed markets, forecasting a drop of 190,000 barrels a day to 49.3 million barrels a day.

In past years, falling demand in rich countries delivered some relief from high oil prices.

But today, most of the oil demand growth is coming from China, India and other fast-growing emerging markets, where consumers are largely protected from the effects of high oil prices because of fuel subsidies that reduce incentives for conservation.

Business Week