WTI oil trading near $99, IEA urge oil supply increase

WTI oil futures open Friday’s trading session hovering near $99 a barrel whilst the IEA commented on Thursday that world oil producers need to increase oil supply to protect any global economic recovery.

Latest WTI Oil Price

US Light crude oil futures for July 2011 delivery was trading at $99.25 a barrel, 06.20 GMT this morning in electronic trading on the NYMEX.

The EIA issued their oil supply warning ahead of next month’s meeting of OPEC. Senior IEA officials, including its executive director Nobuo Tanaka and chief economist Fatih Birol have made similar warnings in the past, but yesterday’s intervention by the governing board marked a departure from the IEA’s usual approach of not commenting on policies adopted by the big oil producers.

Growing Signs that Oil Prices Affecting Recovery

“Despite a near 10 percent correction since 5th May, oil prices remain at elevated levels driven by market fundamentals, geopolitical uncertainty and future expectations. There are growing signs that the rise in oil prices since September is affecting the economic recovery by widening global imbalances, reducing household and business income and placing upward pressure on inflation and interest rates.” the IEA’s statement said.

It went on to say that the governing board “urges action from oil producers that will help avoid the negative global economic consequences which a further sharp market tightening could cause, and welcomes commitments to increase supply”.

Despite the correction in both WTI and Brent oil prices this month, oil futures for both contracts have climbed by more than 20 percent since the start of 2011, driven up in part by the unrest in the Middle East and Africa.

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WTI oil trading near $99, IEA urge oil supply increase