Real, not speculative reasons for record oil: IEA

It is easy to blame speculation for the doubling of oil prices over the past 12 months, but the real reasons are strong demand growth, coupled with shortages of supply and refining capacity, the IEA said on Tuesday.

In its Medium-Term Oil Market Report, the International Energy Agency (IEA) said there was little evidence speculation had distorted prices over both the longer and shorter term, although it noted a lack of data on inventory levels, as well as on financial market participants.

“Blaming speculation is an easy solution which avoids taking the necessary steps to improve supply-side access and investment or to implement measures to improve energy efficiency,” the IEA concluded.

It placed the emphasis on the sheer number of factors responsible for driving up oil, which hit a record of close to $144 a barrel on Monday.

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