Dip in oil prices just a blip?

Global - Oil prices are tipped to stay high despite their recent dip, the International Energy Agency (IEA) said.

Crude oil prices slipped to a four-month low this week at US$113 a barrel, as investors reacted to the developments in Georgia, where Russia announced the end of military operations. The country is a key transit point for crude oil and gas exports from Azerbaijan to Western markets.

The IEA however believed it was too early to say whether the drop in oil prices is the start of a longer trend.

"Oil demand data are coming in weaker on an underlying trend basis," the IEA said in a report. "This only reinforces the view that high prices are beginning to play a central role in determining demand, at least for the Organisation for Economic Cooperation and Development (OECD) countries."

The agency said prices are still high despite a 20% drop from their July peaks and are sustaining inflationary concerns.

The agency lowered its forecast for OECD oil product demand this year by some 16,000 barrels a day to 48.6 million barrels a day, down 1.3% from 2007. It predicts a further 1.1% decrease in OECD oil product demand in 2009.