Saudi Arabia, the world's largest oil producer, boosted its first-quarter oil output by 310,000 barrels per day to 8.8 million barrels amid supply shortages caused by the civil unrest in Libya. The country was then quick to rein in that production increase following the earthquake and tsunami that struck Japan last month, the International Energy Agency said.
IEA said Saudi was expecting to produce an average of 9 million barrels per day in March, but the situation in Japan changed that forecast. IEA estimated that the effects of the earthquake would cut second-quarter demand by 270,000 barrels a day, according to the New York Times.
IEA is forecasting global oil demand of 89.4 million barrels per day in 2011, up 1.6% from 2010. Along with IEA, the International Monetary Fund (IMF) said this week that high oil prices could crimp the global economic recovery. The Organization of Petroleum Exporting Countries (OPEC) said it expects demand for its oil to be 29.9 million barrels per day this year.
Even OPEC acknowledged on Tuesday that high oil prices could have ''a slightly negative impact'' on transport fuel use worldwide, Reuters reported. The cartel accounts for about 40% of the world's oil production.