Oil prices should fall over the coming months due to comfortable reserve levels, but political tensions make it impossible to give a firm prediction, the head of the International Energy Agency, Claude Mandil, said in an interview on Sunday.
Western countries should be allowed to buy into Russian gas companies other than Gazprom, and the European Union needs a single electricity market to increase price competition, Mandil also told the German weekly newspaper Frankfurter Allgemeine Sonntagszeitung.
The IEA advises 26 industrialised nations on energy policy, and Mandil said more energy efficiency and research into renewable energy would help keep down energy costs over the medium term.
With oil trading at $63.60 a barrel on Friday, prices are up by more than $2 since the start of the year and by more than $20 since the beginning of 2005.
Mandil said it was harder to predict where prices would go next. Asked if oil prices would remain high, he said: "I hope not. But I won't make any predictions, as you can't forecast political developments."
"From an economic point of view, oil should become cheaper in the coming months, as reserves are well-stocked ... (and oil companies) are beginning to invest in new capacity. Moreover, saving energy would also press down prices," he said.
Mandil also urged more cross-border competition in the European electricity market, where the EU has criticised countries for trying to block foreign take-overs of domestic utilities.
"We need a common European electricity market, in which all consumers can choose their suppliers freely. That way there'll be more competition between producers," he said.
French state-controlled utility Gaz de France announced a merger with domestic rival Suez last weekend, after Italy's Enel expressed an interest in the latter. Spain beefed up its energy regulator after E.ON of Germany bid for Spanish utility Endesa.
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