PARIS, August 12, 2008 (AFP) – Oil demand is slowing sharply in advanced economies as people ease up on driving, supplies are rising and the market is set to cool well into next year, the IEA said on Tuesday.
But it is too soon to declare the price boom over for now, the IEA warned, pointing to unexpected risks such as conflict in Georgia which threatened “a key energy transit hub” carrying a million barrels of oil per day.
The agency noted in its monthly report that the price of oil had dropped by 30 dollars a barrel from high points in mid July to the beginning of August.
The price on Tuesday was 113.72 dollars dollars per barrel.
Any fall from recent price peaks was welcome, it said, but stressed that a price of 115-120 dollars per barrel “remains high by any measure.”
The IEA said that for some months the signs had “pointed to a potential easing in (market) fundamentals for the second half of 2008 and into 2009, before renewed tightening thereafter.”
But the IEA said it would “hesitate” before saying that the “tipping point” for the market had been reached.
Various disruptions in July and August “have thrown up a number of warning signs,” the IEA said. An improvement in