Slippery Slope

LONDON (Reuters) — World oil demand will rise faster than expected to 2012 while production lags, leading to a supply crunch, the International Energy Agency said Monday. The outlook, which updates an IEA forecast from February, coincides with a jump in oil prices to more than $75 a barrel, closing in on a record high near $79, on concerns of a tightening market. The Paris-based IEA also said additional global refining capacity over the next five years will lag earlier expectations as rising costs and a shortage of engineers delay construction.

The report points to a greater reliance on the Organization of the Petroleum Exporting Countries, the source of more than a third of the world's oil. While foreseeing higher demand, the IEA expects less supply to come from producers outside OPEC and the agency also trimmed a forecast for the 12-member group's unused production capacity. Lower supply from non-OPEC countries and rising demand will boost the requirement for OPEC oil.

• JJ Commentary: Oil will be one of the primary Islamic weapons in the months and years to come.