IEA :High oil prices threaten global economic recovery

High oil prices are threatening the global economic recovery, the International Energy Agency (IEA) Chief Economist Fatih Birol said on Wednesday. The high oil prices "will have a negative impact on the global economic recovery", Birol said in a speech in Singapore. The IEA has said that the global demand for crude is expected to increase by 1.3 million barrels per day to 90.3 million barrels per day in 2012, even after a downward revision by 200,000 barrels a day. Almost half the growth in demand will be contributed by China, the world's largest emerging economy and the world hub of manufacturing activities. The agency said it expected the international oil prices to rise to 120 U.S. dollars per barrel in 2035. The Middle East and North Africa is going to supply over 90 percent of the oil demand growth between 2011 and 2015, with the investment required amounting to 100 billion U.S. dollars per year. However, the crude prices could rise to 150 U.S. dollars per barrel by 2015 if the investment in the Middle East and North Africa runs one-third lower than the 100 billion dollars needed, Birol said. Birol said the oil producing capacity is now at half the level before the war in Libya, one of the key oil producers. He suggested that the oil producing countries should boost their output to meet the growing demand amid falling inventories in wealthy countries. The Organization of Petroleum Exporting Countries is meeting in Vienna to decide whether to change the cartel's output quotas. Birol, who arrived in Singapore from the climate talks in Durban, said the door to capping the climate change at 2 degrees Celsius could be closing on the world if governments failed to act timely. As for the alternative energy sources, Birol said the demand for coal is growing rapidly but its future would depend on man kind's ability to use it more efficiently. Wind is also growing quickly, with China expected to install an additional capacity equal to what the world has today in the coming 20 years, thereby helping bring down the cost of wind turbines.