Higher energy prices could curb growth: Opec

Opec warned on Tuesday higher energy prices could curb global growth and trimmed its oil demand growth forecast, while crude prices hit a record high, driven by fears about supply disruption from the producer group.
"Sustained higher energy prices may pose a risk to growth, especially in economies where consumer budgets face pressure from rising interest rates," Opec said.
In its Monthly Oil Market Report, the Organisation of the Petroleum Exporting Countries revised downwards its 2006 world oil demand growth forecast to 1.43 million barrels per day from 1.46 million bpd in last month's report.
It also revised upwards the call on its crude for this year to an average of 28.5 million bpd, up 100,000 bpd compared with its March report.
The 10 Opec members with formal quotas are producing less than their formal ceiling of 28 million bpd and fears of further Opec supply disruption helped to push US crude prices to a record of $70.88 a barrel on Tuesday.
The market fears Opec member Iran's worsening dispute with the West over its nuclear programme could lead to military conflict and that the shut in could be prolonged of more than 500,000 bpd from another Opec member Nigeria because of militant unrest.
So far, the world economy has proved robust and the impact on global gross domestic product of the rise in oil prices since 2002 has been only around one percent, Opec said, but added downside risks remained.
"Monetary policies have begun to tighten in the USA, Europe and Japan as central banks guard against the inflationary consequences of high commodity prices," its report said.
Opec said the slight downward revision in world oil demand growth compared with last month's report was because of "disappointing consumption" in the United States over the first three months of this year, which was slightly offset by above trend growth in western Europe.
Apart from geopolitical concerns, crude prices have also been pushed higher by lack of refining capacity and new fuel regulations in the United States that traders fear could leave refiners struggling to cope.
Most US refiners will stop using methyl tertiary butyl ether, or MTBE, which has been found to pollute water supplies, and switch to ethanol instead.
Opec predicted there would be further support for prices for light product and refinery margins over the coming months, adding "product market developments may take the driver's seat of the market and provide some support for crude prices."