Oil market OK but fragile, says IEA

WASHINGTON, Feb. 3 (UPI) -- The International Energy Agency is ready to act should oil supplies become constrained, though there's no current problem, a deputy executive said.

The IEA last year called on members to release oil from strategic reserves to offset supply disruptions brought on by the war in oil-rich Libya.

"Emergency oil stocks, as their name suggests, are for use only when the market's ability to efficiently reallocate supplies in a crisis is compromised," IEA Deputy Executive Director Richard Jones said in testimony before U.S. lawmakers.

Jones said emergency action by the IEA could help calm "jittery market nerves in 2012" but currently there was no physical disruptions in the global oil market.

"Ongoing investment in new productive capacity, especially in diverse areas likely to be less susceptible to geopolitical risks and a progressive improvement in energy and oil use efficiency provide longer term routes to greater supply security," he said.

The IEA said oil prices have established themselves at around the $100 per barrel level though that stability may be fragile. Jones said high oil prices were in part to blame from some of the global economic troubles.

"Oil prices at elevated levels pose significant problems for import-dependent countries," he said.