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Global oil demand not to peak soon, India vulnerable to high prices: IEA

Very high prices are not good for oil producers either as it can create serious challenges for them, IEA Executive Director Fatih Birol said

Press Trust of India 

Crude oil
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International Agency said on Wednesday that global demand will not peak in the near future and India's vulnerability to high prices will increase with surge in its crude imports.

demand will continue to grow stronger this year, at about 1.5 million barrels per day, driven by petrochemicals and other sectors, IEA said.

"We are not going to see peak in very soon. I am now worried that we don't have enough investment to meet growth," he told reporters on the sideline of the 16th International Forum here.

He said price spike is not good for anybody, especially India, where the is heavily dependent on

Very high prices are not good for either as it can create serious challenges for them, Birol said.

"Indian will grow more and more driven by transportation, petrochemicals and other sectors. Indian economy's vulnerability to international will also increase. Some oil producing countries may have short term gain from very high prices; in medium and longer term, it is not good for sustainability of their economies," he said.

Talking about single product (crude oil) producing countries, he said they should not be vulnerable to because if they crash their economies may well face serious challenges.

He pointed to flow of and gas in the markets and like renewables to electric cars which may affect across the world.

The global have changed substantially, he said, adding that if there is another price hike there will be a strong response from US production as also from and other developing countries.

Birol said: "We have seen first way of coming to markets....lower prices...but prices picked up . I am going to see second wave of shale oil coming. So the established producers push up price, we will see the response now coming from from US, and elsewhere. So it will put downward pressure on prices as a result of growing from different countries."

On renewables, he said it is mainly solar PVs which are getting cheaper and cheaper and as such many people are using solar.

"Renewables are mainly used for but we use in many other thing-industry and homes. We think while the renewables will grow strongly, we will still need for many years to come. Countries like need to look after their security as well as their effort for upliftment of "

He was of the view that is an important country and its economic growth, which is one of the bright spots of global today, is linked to especially

In that respect it is very important for economy and global economy that we don't see price spikes, he added.

He also said,"We are seeing some surprises in Shale oil is growing very strongly. In the next five year, about two third of global would be met only by US This is definitely a game changer. Established will like to see a different picture in the but US is coming very strongly, so is Canada, and among other countries."

He also talked about challenges such as decline in in mature fields and low investment in which may lead to crude price surge by established players.

First Published: Thu, April 12 2018. 00:44 IST