courtesy EnCana

Oil at between $115 and $120 a barrel is “disastrous” for developing economies without hydrocarbons, and those countries can only expect “an easing of fundamentals” over the next half year, International Energy Agency chief, Nobuo Tanaka told delegates at the ONS 2008 tradeshow.

He said risks came primarily from oil companies’ ability to keep pace with demand and the developing world’s own potential for rapid economic growth. Yet, Tanaka said the IEA was still revising downward its demand numbers, although supply looked worrying over the next five years.

“The ongoing issues of decline, project delays and geopolitics have also lowered our expectations on the supply side,” he said, adding, “As a result, we expect the spare capacity cushion to remain worryingly low towards 2013.”

It means prices will not return to the levels of a few years ago “anytime soon”.