IEA economist cheers Saudi oil output rise

The International Energy Agency (IEA) said a boost in Saudi oil output would provide welcome relief from the threat that high fuel prices pose to efforts to revive the global economy.

The Paris-based IEA, which advises industrialised countries on energy issues, has warned that Brent prices over $100 a barrel are a threat to the global economy. Brent traded above $108 a barrel on Monday and has averaged over $111 for the year.

Saudi Arabia’s output increase in November was timely, given low global oil inventories and poor output from non-OPEC producers, IEA chief economist Fatih Birol told a seminar in Australia on Monday.

"OECD stock levels are at historically low levels, plus we are in a very fragile economic recovery situation," Birol said.

"And higher prices than we have now can strangle economic recovery efforts worldwide, therefore the Saudi production boost currently and in the future will be very much welcomed."

Reuters