High oil prices beginning to hit demand

Soaring oil prices are beginning to hit demand, which has been trending downwards in recent months, the International Energy Agency said Tuesday. "There are real risks that a sustained $100 dollars a barrel-plus price environment will prove incompatible with the currently expected pace of economic recovery," the agency said in its monthly report. The IEA noted that "global oil demand growth has shown signs of slowing in recent months in the face of sharply higher prices." Following six months of forecast increases, the IEA kept its oil demand forecast for the rest of the year unchanged: that should reach 89.4 million barrels per day (bpd), 1.6 percent up on 2010, it said. World oil production dropped by 70,000 bpd to 88.3 million bpd in March, due to a 70 percent drop in production in Libya, where rebels in the east of the country are fighting Moamer Gadaffi's regime, backed by NATO air strikes. "The loss of Libyan production and the 25-30 percent jump in oil prices since the crisis began in mid-February has so far drawn a limited response from fellow OPEC (Organisation of Petroleum Exporting Countries) members," the IEA said.