The International Energy Agency (IEA), the Paris-based energy watchdog of 28 developed countries including Ireland, warned today about potential risks to the economic recovery posed by high energy costs.

In New York, the US light crude benchmark, West Texas Intermediate (WTI), fell $1.22 to 83.12 a barrel, while Brent North Sea crude for May dropped 49 cents to $84.628, despite the IEA today revising up its forecast for global oil demand in 2010 by 30,000 barrels per day owing to unexpectedly strong economic activity in the US, Asia and the Middle East.

The agency said in its April report (summary below) there was plenty of oil around to sate increasing demand, but added that higher crude prices could "stall [rich nations'] economic recovery or render it more 'oil less' than we currently envisage."  It warned in its latest monthly report that oil prices above $80 a barrel could hamper economic recovery.

Crude oil futures hit 18-month highs in early April,with expectations for an accelerating economic recovery, spurring financial and commodity markets, and stronger oil demand ahead. Nonetheless, underlying concerns remain that oil markets are overheated with WTI and Brent both recently trading around $85/bbl.

Global oil demand is revised down by 70 kb/d in 2009 and up by 30 kb/d in 2010on preliminary data adjustments in the OECD and non-OECD (Asia, Africa and Middle East). With demand now seen at 84.9 mb/d in 2009 and 86.6 mb/d in 2010, year-on-year growth averages -1.3 mb/d and +1.7 mb/d, respectively.

Global oil supply fell by 220 kb/d to 86.6 mb/d in Marchon lower OPEC output. Non-OPEC supply was unchanged in March at 52.5 mb/d, and up by 900 kb/d year-on-year. Non-OPEC 2010 output is revised up 220 kb/d to 52.0 mb/d, reaffirming a more optimistic supply outlook amid elevated price levels since 2Q09. Non-OPEC supply and OPEC NGLs should rise by a combined 1.3 mb/d in 2010.

OPEC crude production posted its first significant monthly declinein over a year, falling by 190 kb/d in March to 29.0 mb/d. Yet the lower output reflected a near 10% decline in Iraqi crude rather than effort by OPEC-11 members to rein in above-target output. OPEC-11 production, which excludes Iraq, increased by 30 kb/d to 26.7 mb/d.

Global refinery throughput is estimated at 72.5 mb/d for 1Q10,800 kb/d above 1Q09 – the first annual increase since 2Q08, though from a low base. While China, India and Russia all posted record highs in February, European throughputs fell to their lowest level in 17 years. Global runs should seasonally rise to 72.9 mb/d in 2Q10 (+1 mb/d year-on-year).

OECD industry stocks fell by 38.4 mb to 2 685 mb in February, 1.6% below 2009’s level, with lower crude, distillates and ‘other products’. End-February forward demand cover rose to 60.0 days, but stood 0.9 days below levels of a year ago. Preliminary March data point to a 8.0 mb OECD stock build amid continued decline in floating storage.