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Opec calls for IEA oil release halt

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The oil cartel warned that growth in the global economy is set to slow down later this year resulting in a dive in demand for oil.

Member countries of the IEA voted last week to release 60 million barrels of oil onto the market in an attempt to ease price pressure. Today the body said European countries would be releasing mostly refined products with the US tapping its crude reserves.

Opec Secretary-General, Abdullah al-Badri, today criticised the move and the amount of oil which was being released.

“I hope this practice will be stopped and stopped immediately,” Reuters quoted al-Badri as saying.

“We don’t see a good reason to release this quantity and I hope the IEA will refrain from using this practice.”

Al-Badri was speaking after the eight ministerial-level meeting between the European Union and Opec in Vienna today. In the meeting the oil cartel “highlighted the robust rebound in the global economy in 2010, albeit at an uneven pace across different regions”.

Opec warned, however, that the momentum “is expected to moderate this year, due to such issues as debt burdens, particularly in some parts of the EU region, inflationary pressures in major economies and prolonged unemployment, thus creating downward risks with regard to the level of oil demand in the near future”.

It continued: “On the supply side, the physical market continues to be supported by above-average trend growth in major producing regions, as well as sufficient stock levels”.

Opec also claimed that it “continues to offer an adequate level of spare [oil] capacity for the benefit of all”.

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