LONDON -(Dow Jones)- Prospects for global economic recovery may be damaged if oil prices rise too quickly, the head of the International Energy Agency told Dow Jones Newswires Monday.
IEA Executive Director Nobuo Tanaka said he couldn't give a price that would damage the world economy, but added that it was the speed of a rise in prices that would have an impact.
"If current oil prices move up very fast in a spike, then it could have an impact on economic recovery," Tanaka told Dow Jones Newswires on the sidelines of a Chatham House coal conference in London.
Oil prices have been rising recently, partly due to the Organization of Petroleum Exporting Countries' output reductions, which began nearly nine months ago and have removed around 3.4 million barrels a day from world markets in recent months.
Although still well below the record high of $147 a barrel hit last July, prices are still up around $40 since OPEC's last meeting in March.
Last week, Saudi Oil Minister Ali Naimi said oil prices could top $75 a barrel in coming months as excess supply in the market is mopped up.
"To OPEC, we say watch the market carefully, make flexible decisions and keep the economy on the path to recovery," Tanaka said.
However, the head of the Paris-based watchdog for the world's major energy- consuming nations added that it would be good if the price was at a high enough level to stimulate investment in energy efficiency, renewable energy, while not impacting economic recovery so climate change targets can be met.
"There are many different elements that need to be taken into account when looking at oil prices," he said.
At 1140 GMT, the front-month July Brent crude contract on London's ICE futures exchange was up $1.59 at $67.11, having earlier hit a seven-month high of $ 67.69.
-By Selina Williams, Dow Jones Newswires; +44 207 842 9262; selina.williams@ dowjones.com
(END) Dow Jones Newswires
06-01-090757ET
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