Oil price volatility 'remains a concern'

25 June 2010

Posted by Neil Brunskill

There is a need to take action to prevent excessive price volatility entering the oil and gas markets, the International Energy Agency (IEA) has warned.

At the publication of the group's latest report, Medium-Term Oil and Gas Markets, executive director Nobuo Tanaka highlighted the need to make more timely investment decisions so that excessive price volatility can be avoided.

Head of the IEA oil division David Fyfe told Reuters that the risk presented by sharp increases in oil prices present more of a threat to economic recovery than the prices themselves.

"The uncertainty that volatility creates almost becomes self-perpetuating on the investment side in the industry and uncertainty about where prices might be headed in the future is not helpful," he told the news agency.

Mr Tanaka said that there is a need to push forward with new investment projects so that future supplies are not affected by factors other than resource availability.