While the Organisation of Petroleum Exporting Countries has decided to leave output unchanged, crude oil supplies remain very tight, as the IEA has noted for the past six months. At the same time, very high oil prices may be adding additional pressures to currently significant economic risks. We have seen a sharp draw in petroleum stocks in OECD countries which will have ongoing effects. Furthermore, the tightness in the crude market has resulted in weak refining margins and therefore lower levels of refinery activity at a time when refiners normally build product stocks ahead of spring maintenance.

Even taking into consideration the increased potential for global economic weakness, there is considerable uncertainty over future demand. It is not clear that even keeping output steady through to the end of the second quarter will do enough to replenish oil stocks to last year's levels or the five-year average. It will be important that stocks are rebuilt to ensure sufficient supplies ahead of and during the summer and winter months.

The IEA is concerned about global economic growth which is in the interest of both consumers and producers. With the current pressures from the financial system, the economy does not need additional downward pressure on consumer spending and growth from near record oil prices.