CANBERRA (Reuters) - 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 IEA has warned that benchmark Brent oil prices over $100 a barrel are a threat to the global economy. Brent traded at over $108 a barrel on Monday.
The Saudi November output rise was timely, given low global oil inventories and poor output from non-OPEC oil 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.”
A senior Saudi oil official told Reuters last week the kingdom produced 10.047 million barrels per day (bpd) of crude oil excluding condensate in November, the highest rate for decades.
Demand for crude would remain strong driven by energy hungry China, he added. November crude imports and implied oil demand in the world’s number two crude importer were the second-highest on record.
The figure, greeted with some skepticism by analysts, came as the European Union mulls a ban on oil from OPEC member Iran, a move that could put further upward pressure on oil prices as the Organization of the Petroleum Exporting Countries (OPEC) meets in Vienna on December 14 to discuss production.
Birol said it was too early to judge the possible impact on the global market and prices of EU sanctions on Iran, as the EU had not yet made a decision.
Birol earlier told the seminar on the IEA’s World Energy Outlook that consumers globally should brace for oil prices in the coming years of up to $150 a barrel, with demand from China set to leap.
OPEC delegates say the cartel’s Vienna-based secretariat will recommend it agree an output target of 30 million bpd for the first half of 2012, above anticipated demand for OPEC crude of 29.9 million bpd in the first quarter and 28.7 million bpd in the second quarter.
Adopting such a high output target, a policy likely to be supported by Saudi Arabia, would allow oil stocks to build and help restrain oil prices, which have been at historic highs.
Countries from around the globe agreed on Sunday to forge a new deal forcing all the biggest polluters for the first time to limit greenhouse gas emissions, but critics said the plan was too timid to slow global warming.
A package of accords agreed after marathon U.N. talks in South Africa extended the 1997 Kyoto Protocol - the only global pact enforcing carbon cuts - allowing five more years to finalize a wider pact which has so far eluded negotiators.
“The good news is that for the first time we have a roadmap that is supported and signed by all the governments who need to be involved,” Birol said. “However, the question mark I have in my mind is that I hope this roadmap wouldn’t lead some of the countries not to act for the next 10 years, or act inefficiently.”
Kyoto’s first phase -- due to expire at the end of next year but now extended until 2017 -- imposed limits only on developed countries, not emerging giants like China and India. The United States never ratified it.
Those three countries and the EU held a last-ditch huddle in the conference centre before finally agreeing to wording committing them to a pact with legal force, although its exact form was left vague.
Countries also agreed the format of a fund to help poor nations tackle climate change.
“We see some steps in the rough direction by many countries such as Europe, such as Australia, such as China ... These are good steps in the right direction.”
Reporting by Rob Taylor; Editing by Lincoln Feast