Oil prices fell this evening as the International Energy Agency warned about potential risks to the economic recovery posed by high energy costs. US crude dropped 84 cents to $83.50 a barrel, while Brent North Sea crude slipped 29 cents to $84.48.
The IEA revised up its forecast for global oil demand in 2010 by 30,000 barrels a day owing to unexpectedly strong economic activity in the US, Asia and the Middle East.
But it also warned in its latest monthly report that oil prices above $80 a barrel could hamper economic recovery.
Oil prices spiked well above $80 last week after trading in a $70-$80 range, a level deemed satisfactory by the Organisation of Petroleum Exporting Countries (OPEC) and consumers.
Meanwhile, the IEA also raised its forecast for oil supply from countries such as Canada and Russia which do not belong to OPEC - whose member nations together pump about 40% of the world's crude. The IEA offers advice on energy policy to the Organisation for Economic Co-operation and Development (OECD), a group of 30 developed-world nations.
