LONDON - Any move to limit oil production could hurt the struggling global economy, the International Energy Agency said on Wednesday after OPEC agreed to cut output.
"First of all, $100 per barrel remains very high in anyone's terms," said David Fyfe, an analyst with the IEA's Oil Industry and Markets Division, told Reuters.
"With the fragile economy and the importing countries grappling with budgetary issues and inflation, our view is that removing oil from the market in that time might be a bit unhelpful but let's wait and see what actually happens."
At a meeting in Vienna, OPEC said it was effectively removing around 500,000 barrels per day (bpd) from the market after high fuel prices and wider economic problems hit demand in the United States and other large consumer nations.
Oil prices have fallen from a record above $147 a barrel in July to around $103 a barrel for U.S. crude. London Brent crude fell below $100 on Tuesday for the first time in five months.
"We see pressures on the global economy remaining intense," said Fyfe after the IEA lowered its demand growth forecasts in its monthly report.
"Any move to constrain supply could prove counter-productive," he added, noting the upcoming winter heating season and threat of hurricanes to U.S. oil infrastructure could change fundamental market expectations.
It remains to be seen whether OPEC will remove as much oil from the market as it is saying it will.
Production allocations for the group's members have been adjusted to take account of membership changes.
Once the complexities of Wednesday's output policy announcement were digested, analysts said the new announced output target of 28.8 million bpd was not a major change from the previous ceiling and members could overshoot.
"I'm not sure it was such a surprise, I think there was probably a desire to reach a consensus between those who may be see $100 per barrel as a price floor and those who might be content for prices to go a bit lower," said Fyfe.
"First of all, $100 per barrel remains very high in anyone's terms," said David Fyfe, an analyst with the IEA's Oil Industry and Markets Division, told Reuters.
"With the fragile economy and the importing countries grappling with budgetary issues and inflation, our view is that removing oil from the market in that time might be a bit unhelpful but let's wait and see what actually happens."
At a meeting in Vienna, OPEC said it was effectively removing around 500,000 barrels per day (bpd) from the market after high fuel prices and wider economic problems hit demand in the United States and other large consumer nations.
Oil prices have fallen from a record above $147 a barrel in July to around $103 a barrel for U.S. crude. London Brent crude fell below $100 on Tuesday for the first time in five months.
"We see pressures on the global economy remaining intense," said Fyfe after the IEA lowered its demand growth forecasts in its monthly report.
"Any move to constrain supply could prove counter-productive," he added, noting the upcoming winter heating season and threat of hurricanes to U.S. oil infrastructure could change fundamental market expectations.
It remains to be seen whether OPEC will remove as much oil from the market as it is saying it will.
Production allocations for the group's members have been adjusted to take account of membership changes.
Once the complexities of Wednesday's output policy announcement were digested, analysts said the new announced output target of 28.8 million bpd was not a major change from the previous ceiling and members could overshoot.
"I'm not sure it was such a surprise, I think there was probably a desire to reach a consensus between those who may be see $100 per barrel as a price floor and those who might be content for prices to go a bit lower," said Fyfe.
