Oil boom over, says think-tank

A LEADING international energy think-tank said the oil boom on world markets is over and predicted that prices are likely to fall over the coming months.

The Paris-based International Energy Agency (IEA) said a turning point had been reached after a surge in crude production worldwide and the effect of high prices on economic growth.

While conceding a potential shortage of heating oil in the US could still cause problems, it claimed oil markets should continue to ease.

US light crude has fallen by 15% since hitting a high of $55.67 at the end of October, and today was off a further 10 cents at $47.27 in futures trading.

The IEA said many countries have already begun to feel the effect of the recent high prices and had revised gross domestic product estimates. It added that Chinese demand is cooling.

Supplies are also continuing to rise, jumping 890,000 barrels a day last month to 84.6m with the Opec oil cartel pumping out 30m, a level not seen on a sustained basis since 1979.

Saudi Arabia held production above 9.5m barrrels a day, while Iraqi output averaged close to September's 2.2m.

Opec president Purnomo Yusgiantoro is due to comment on prices at a conference in Vienna today. The cartel is expected to keep output high over the winter.

The IEA said UK production is expected to slide 9% next year. Figures revealed the UK ran its first oil deficit in September.