IEA Head:Sees $1 Trillion Stimulus If Current Oil Price Holds

LONDON -(Dow Jones)- International Energy Agency Executive Director Nobuo Tanaka said Thursday that the current level of oil prices is "helpful" for global economic recovery and could bring a stimulus effect of $1 trillion if sustained throughout 2009.

"This is a very helpful price level for economic recovery," Tanaka told Dow Jones Newswires in an interview. "The stimulus effect of lower prices is about $1 trillion - it's a huge stimulus for importing countries."

Tanaka was referring to the economic stimulus potential if current oil prices of around $44 a barrel, down from a record high of around $147 a barrel in July, are sustained.

The IEA, which coordinates energy policy for the Organization for Economic Cooperation and Development, wants OPEC to continue to invest in oil-supply capacity. Otherwise, the oil market could experience a shortfall of oil when economic recovery brings renewed strength in oil demand, Tanaka said.

"We're concerned that if we don't see much investment, then a supply crunch could return as early as 2013," Tanaka said, referring to when energy demand is likely to increase as economies recover.

-By Selina Williams, Dow Jones Newswires; +44 20 7842 9262; selina.williams@dowjones.com

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(END) Dow Jones Newswires

March 05, 2009 06:33 ET (11:33 GMT)

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