Oil might be getting expensive, but we're all covered- says IEA
The International Energy Agency said oil markets were currently well supplied and did not warrant any action by the West’s energy watchdog despite a recent spike in prices. Supply outages from Libya and concerns the escalating situation in Syria could spill into other Middle East countries has pushed up prices for international benchmark Brent by nearly $8 this month to over $115 a barrel. The IEA comprises OECD countries that hold strategic inventories which can be released in the event of a supply disruption in oil markets. A spokesman for the IEA said that while the agency was concerned about the impact of high oil prices on the global economic recovery, currently the market was 'adequately supplied.' 'While the IEA, as always, stands ready to respond in the event of a major supply disruption, the current situation does not call for an IEA response,' the spokesman for the IEA’s Secretariat in Paris said in a statement by email. In 2011, the IEA coordinated an effort by member states to release emergency stocks in response to disruptions caused by the unrest in Libya. Analysts have warned prices could spike sharply if violence in Syria spills over into larger oil producing countries in the region. Meanwhile, IEA has warned of further delays and cost blowouts at Australia’s $190 billion pipeline of LNG projects, many of which it says may be too exposed to any changes in LNG pricing. The energy watchdog also does not see expansions of plants such as Gorgon, let alone any new developments, going ahead in the nation’s current uncompetitive environment, which is becoming more exposed as US LNG prospects grow. 'In the past year, we have become even more pessimistic about the project management aspects of Australian LNG – there is very clear evidence that the ability of the industry to manage these projects is stretched to the limit. This is concerning, because while LNG in Asia is quite expensive and has a premium pricing, if you have very, very high project costs some of these projects will be quite exposed to any change in Asian markets. Australian projects still involve significant risk of further cost overruns and delays,' IEA said.