Gazprom, Russia's gas monopoly, on Tuesday predicted oil prices would reach $250 a barrel in 2009.

The prediction came as the developed world's energy watchdog warned that record high oil prices were needed to choke off demand in order to balance the oil market.

The statement is the International Energy Agency's most candid admission that oil supply is struggling to catch up with relentless Asian demand for oil and last week's jump. The price of oil rose $16.24 in less than 36 hours to a record $139.12 a barrel by Friday.

• Record oil prices 'needed to balance market'
• The Short View: Oil and the dollar

Speaking at a strategy presentation in Deauville, Alexey Miller, Gazprom chief executive, said: "Today we witness a very great change for hydrocarbons, the level is very high and we think it (the price of oil) will reach $250 a barrel."

A company spokesman specified that Gazprom believed that level would be hit in 2009.

The prediction is substantially higher than those being made by analysts, who see oil prices in 2009 ranging between $100 and $200 a barrel.

In its monthly oil market report, the IEA said that "supply growth so far this year has been poor and higher prices are needed to choke off demand to balance the market". It added: "Abnormally high prices are largely explained by fundamentals".

The market responded by pushing prices back up after they fell below $134 a barrel earlier in the session. The IEA said "supply growth so far this year has been poor and higher prices are needed to choke off demand to balance the market". Nymex July West Texas Intermediate rose 70 cents to $134.95, while ICE July Brent added 53 cents to $134.38 a barrel.

• G8 ministers call for oil output rise

In its report, the IEA cut slightly, as expected, its oil demand growth forecast for the year, but surprised the market with a deep reduction in its non-Opec supply growth forecast, leaving the world economy more dependent than anticipated on Opec, the oil producers' cartel.

"This is a case of supply and demand pulling in opposite directions to push prices higher," the IEA said. "Global market fundamentals showed continued tightness, with constrained supplies and robust non-OECD demand growth."

It cut its demand growth forecast further by 80,000 barrels a day to an annual increase of 800,000 b/d because of record high prices, the slowdown of the US economy and the partial removal of fuel subsidies in some Asian countries.

The agency said that every day there were fresh signs of demand destruction, particularly in sectors such as airlines, but it warned that so far there were "very few signs of slowing demand in non-OECD countries where economic growth is far more significant than price in determining demand".

• Soros sounds alarm on oil 'bubble'

The reduction is oil demand growth was overshadowed by a larger cut in forecasted supplies. The IEA reduced its forecast for non-Opec supply growth to just 455,000 b/d, or 225,000 b/d below last month's forecast. It expected most of the non-Opec fresh output to be in the form of biofuels, which would account for 72 per cent of the supply increase. The non-Opec supply growth forecast for 2008 is now below the growth achieved by the group both in 2007 and 2006 in spite of significantly higher oil prices.

The smaller-than-expected supply increase from non-Opec countries would reduce the spare capacity available to Opec to below 2m b/d for the first time since the third quarter of 2006. The IEA said that Opec continues to dominate global supply growth, as non-Opec production has languished at or below levels of a year ago for the past three quarters.

Opec supplies averaged 32.3m b/d in May, up almost 400,000 b/d from April. Iraqi supply hit a six and a half year high at 2.5 mb/d, the IEA said.

The agency warned that the imbalance between demand and supply forced a counter seasonal drop in rich countries oil inventories in April. It estimates that stocks fell in April by 8.1m barrels. This compares to a traditional increase in April of about 30m barrels.

The IEA warned that the current oil prices could "impinge upon growth prospects" even though the global economy is more resilient to rising oil prices. "Globally, the high oil price is contributing to inflationary pressures," it said.

The warning from the IEA echoed Monday's comments by Tony Hayward, chief executive of BP, who said that the oil market was not well supplied. "In a well functioning market where supply and demand are balanced, prices should be stable. Where prices are high, however, they show that supply is not responding adequately to rising demand ... and that is where we find ourselves today," Mr Hayward said.

Francisco Blanch, head of commodities research at Merrill Lynch, said on Tuesday he was raising his forecast for West Texas Intermediate crude oil in the second half of the year to $121.5 a barrel on "a combination of lower than expected supplies and unrestricted demand. Non-OPEC output is really struggling to expand".

Gazprom is said to have its sights on investing in TNK-BP. But Alexander Mededev, director general of Gazprom Export, said the company would consider any interest in TNK-BP only after the internal conflict between the company's parent shareholders was resolved.

However, Gazprom has ambitions to increase by 2012 its share of oil to 15 per cent of its entire production, which is currenlty largely natural gas.

The company expects to invest $30bn this year and expects to have a market capitalisation of $1,000bn within seven to 10 years.