IEA says oil price rally may start to ease

The International Energy Agency (IEA) said Tuesday a reprieve from soaring oil prices may be on the horizon as output increases.

Shortages of natural gas and coal have triggered a switch to oil, boosting demand for crude and fuelling a rise in prices.

Last month, the IEA, which advises governments on energy policy, said oil prices were "scaling multi-year highs."

But on Tuesday, it sounded a note of optimism, saying that tide may be turning.

"The world oil market remains tight by all measures, but a reprieve from the price rally could be on the horizon," the Paris-based agency said.

It cautioned however that was not because demand for high-polluting oil was decreasing, "but rather due to rising oil supplies."

Prices had until now risen on the back of a global economic recovery, while supply from producer countries remained tight.

The price of a barrel of oil rose by around $20 between the end of August and mid-October, before reaching a plateau in recent weeks at around $80.

But the IEA said global oil production was on the rise.

In October, oil supplies leapt by 1.4 million barrels a day (mb/d), with the US post-hurricane recovery accounting for half the increase.

A further boost of 1.5 mb/d is expected over November and December.

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