IEA says further oil reserve release unlikely
IEA says further release from stockpile unlikely; No member countries proposed additional release; IEA to release statement in hours - Reuters
July 21, 2011 11:58 by Reuters
The International Energy Agency (IEA) is unlikely to release more oil from emergency reserves as none of its 28 member nations have proposed it, Executive Director Nobuo Tanaka said on Thursday.
Oil prices fell after the news, with Brent crude trading down 49 cents on the day at $117.66 a barrel at 0756GMT.
The IEA announced on June 23 the release of 60 million barrels from emergency stockpiles over 30 days in a temporary step to fill a supply gap caused by disruptions in Libyan output. Oil prices fell around 10 percent in the days following the release but have since recovered.
The agency will make an announcement on whether it will release additional oil in a matter of hours, he told Reuters in an interview.
The agency would be flexible and would be ready to act and release more oil if necessary, Tanaka said.
Top oil exporter Saudi Arabia was expected to increase its oil output to around 10 million barrel per day in July, up around 200,000 bpd from June, Tanaka said.
Saudi Arabia has boosted supply unilaterally after it failed to convince other OPEC members of the need to make a coordinated increase in supply in June.
The IEA release followed that failure.
The last release by the IEA was in 2005 when Hurricane Katrina devastated oil infrastructure in the US Gulf of Mexico. The only other release in the 37-year history of the IEA was at the time of the first Gulf War.
Traders and anlaysts have said there is no sign yet of the kind of shortage to mandate another dip into the West’s emergency oil reserves.
Germany and Italy were expected to oppose any second release of emergency oil reserves by the IEA because they were not much in favor of the decision in June, sources have said.
Tanaka has said the IEA has enough oil to take a step as the last one for 24 months more if necessary.
The agency, part of the Paris-based OECD, was formed in response to the 1973/74 oil crisis and promotes energy diversity and efficiency. (By Osamu Tsukimori; Editing by Michael Watson, Edmund Klamann and Simon Webb)