The West's main energy watchdog, the IEA, called on Saturday on oil group Opec to be flexible in the face of instability in the Arab world, saying prices could spike even because of a small disruption. "At this moment the Suez Canal is open and there is no problem with the supply side," the executive director of the International Energy Agency, Nobuo Tanaka, told Reuters referring to riots in Egypt.
"But of course the market has been tightening because of the demand increase due to a recovery. The oil price is rising so a small disruption can create a spike," he said on the sidelines of the World Economic Forum in Davos. Brent oil hit a 28-month peak near $100 a barrel while US crude surged more than 4 percent on Friday as unrest in Egypt rattled markets.
"We are watching carefully what is going on (in Egypt) and will respond accordingly - for us how to use our strategic stockpiles and for Opec how to use their spare capacity," Tanaka said. "I think Opec is ready to use their spare capacity when they need, this is what (Opec's Secretary General Abdullah) al-Badri, this is what (Saudi oil minister Ali) al-Naimi says.