"The current price level is alarming, OPEC must continue to be alarmed about the future," Nobua Tanaka told Zawya Dow Jones on the sidelines of a renewable energy summit in Abu Dhabi, the United Arab Emirates' capital.

Nymex light, sweet crude futures for delivery in February traded at $90.90 a barrel at 0930 GMT Tuesday, down 64 cents. Prices eased on the back of a stronger U.S. dollar against the euro but have hovered around the $90-a-barrel mark in recent weeks. ICE March Brent was down 42 cents at $97.96 a barrel at 1015 GMT.

"The producer countries must be flexible with their decisions in the coming months and watch carefully the market's fundamentals," Tanaka said.

OPEC Secretary General Abdalla Salem El Badri told Austrian financial daily Wirtschaftsblatt Monday that the cartel considers the oil market well supplied and believes the recent price surge is driven by speculation and production disruptions rather than higher demand.

"OPEC won't intervene because of speculators," El Badri said, according to the paper. "For a start, we need to wait and see what the trend will be, but we are observing the market, and OPEC will intervene to stabilize the market if it's out of balance."

OPEC last met in Quito, Ecuador, in December and chose to leave the group's official production quotas unchanged. The producer group is scheduled to meet again in the Austrian capital Vienna on June 2.

The IEA's Tanaka said in Abu Dhabi that the oil market looked like it is tightening.

"We think the market is potentially getting tighter," he said. The oil market was "very tight" towards the end of 2010 as demand temporarily increased, Tanaka added.

"If economic recovery is getting robust in OECD countries, while having good growth in emerging countries like China and India, we may see, let's say, the upside risk of the price," he said.

-By Nour Malas, Dow Jones Newswires, +97150 2890223; nour.malas@dowjones.com

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