No answers yet on when oil prices will drop

Madrid: As crude soared to a new record, the head of the International Energy Agency (IEA) declared on Tuesday that the world was in the grip of an 'oil shock', while the president of the Organisation of Petroleum Exporting Countries (Opec) acknowledged he could not say whether prices would flatten out - or continue to soar.

The comments by IEA chief Nobuko Tanaka, Opec chief and Algerian energy minister Chakib Khelil and other industry leaders at the 19th World Petroleum conference reflected the concern surrounding record prices that seem ready to spike higher.

An IEA report released at the conference confirmed what most consumers fear: that supplies of oil will remain tight, whether for cooking fires in the poorest countries or powering cars and cooling or heating homes in the richest.

And that's despite record prices and reduced demand as costly crude dampens the world's oil hunger. "We are clearly in the third oil price shock," declared Tanaka.

But he suggested there is less of a likelihood of a quick fix this time. "Those price peaks forced consumers into saving oil" and oil companies to look for new wells, said Tanaka, but now "the biggest energy savings have been made [and] the easy oil outside a few countries has been found."

The energy agency predicted producers would be able to meet world needs - but noted that supply will exceed projected demand only by a daily two million barrels, a relatively thin cushion.

Khelil offered no solace to consumers. "We are very uncertain about the oil prices since it's highly volatile, and we don't really know whether it is going to be stabilising or going to lower levels," he said.

"But everybody agrees that oil prices are too high. There is a lot of uncertainty about demand," Khelil said.