PARIS, Aug 15 (AFP) - Record oil prices last week, the result of "irrational exuberance" in the IEA's eyes, reflect worries about global production that not even Saudi Arabian promises to pump more crude were able to brush away.
With extremely firm demand, caused in large part by China's booming economy, the global oil supply is currently dogged by the conjuncture of different supply problems in key producing countries, driving the market into a frenzy.
On Friday, New York's benchmark light sweet crude for delivery in September leapt 1.08 dollars to a record high settlement of 46.58 dollars a barrel. It spiked at an all-time high 46.65 dollars.
London's Brent North Sea crude oil for September soared 1.59 dollars to a record finish of 43.88 dollars a barrel after hitting an all-time high of 43.92 dollars.
With nothing seeming to hold back oil prices, the International Energy Agency (IEA), which represents the interests of major oil consumers, made an appeal to the market for calm.
"The market is tight, production and infrastructure capacity is less than desired and uncertainties continue to weigh on the market. But, does this justify 45-dollar (per barrel) oil? Current oil prices are a concern and are causing economic damage," it said in its monthly oil market report published Wednesday.
The Paris-based organisation judged that there was no concrete reason to get so worked up about oil supply because "crude is on offer" and "supply is running ahead of demand".
And yet the IEA's statements, which are usually taken seriously by oil traders, fell on deaf ears in the market, where all eyes were focused on the chaotic environment -- the Yukos saga in Russia, violence in Iraq and the run-up to Sunday's referendum in Venezuela.
Yukos, which produces 20 percent of Russia's crude exports, is struggling to remain solvent after announcing it was in default of 1.6-billion-dollar (1.3-billion-euro) loan.
Illustrating concerns about Yukos, US national security adviser Condoleezza Rice telephoned Russian President Vladimir Putin's chief of staff to voice concerns about about how the Yukos crisis was being handled and its impact on the market.
In addition to the Yukos affair, the situation on global oil markets was made worse by heavy fighting in Iraq, where Shiite insurgents were threatening to blow up strategic oil infrastructure in the south of the country. As a result, exports dropped sharply after pumping was halted on Monday.
At the southern Basra terminal, crude exports tumbled to 35,000 barrels an hour from 80,000 barrels an hour.
In addition to the turbulence in Iraq, experts are worried a key referendum Sunday in Venezuela could lead to a strike in the country's oil sector.
The market was also bracing for a tropical storm threatening the United States on the Gulf of Mexico causing oil platforms to be evacuated.
Against this backdrop, Saudi Arabia's pledge to boost crude production was all but forgotten.
Saudi Arabian Oil Minister Ali Al-Nuaimi said Wednesday that his country was ready to increase oil output by 1.3 million barrels per day (bpd) "immediately" to cope with world demand and curb soaring prices
But analysts took the Saudi Arabian offer as more a show of goodwill towards the United States, by far the biggest oil consumer, than as a concrete move to calm the market.
Experts said that an increase in oil production of 1.3 million bpd, the means of which were left vague, was not enough in face of the production problems in different countries.