|
IEA leaves emergency oil release unchanged Agency won’t extend 30-day emergency release, calls on OPEC to raise production; release could be extended at end of 30 days Laurence Frost Associated Press Business Writer
The International Energy Agency decided Sept. 15 not to extend the 30-day emergency release of oil stocks it put in place after Hurricane Katrina swept through the U.S. Gulf Coast, but called on OPEC to raise production and build up capacity.
The IEA said it would “maintain its action of making available to the market 60 million barrels of oil and oil products for a period of 30 days” and will review the situation at the end of September or in early October.
U.S. officials present at the meeting, who included Assistant Energy Secretary Karen Harbert, “welcomed the IEA’s emergency response as timely and appropriate,” the IEA said.
The Paris-based organization, a club of mainly industrialized oil-importing countries, said Sept. 2 that its members would release the equivalent of 60 million barrels of oil from strategic stocks over one month to help ease the soaring prices of oil and gasoline.
Hurricane Katrina, which hit at the end of August, struck key oil production and import infrastructure. The U.S. government has said 58 percent of crude oil production off the U.S. Gulf Coast remains shut down and refineries were operating at 87 percent capacity. Release could be extended later The speed of the group’s response to Washington’s request for the emergency supplies showed that a decision on whether to extend it could be made just before the end of the 30-day period, IEA Executive Director Claude Mandil said at a news conference.
“Many things can happen in between,” Mandil said. The final determination will take account of factors including “the pace of recovery of the facilities in the Gulf of Mexico, the market response to the decisions we have taken and the level of prices and the response to all the flexibilities which have been decided.”
He said the IEA was in close contact with producers, in particular with leaders of the Organization of Petroleum Exporting Countries.
OPEC meets Sept. 19 in Vienna, Austria, and is widely expected to increase its production ceiling by 500,000 barrels a day.
“Any increase in OPEC production will be a good signal to the market and would be welcome,” Mandil said.
However, he also said OPEC countries — which produce mainly heavy crude — would find it difficult to meet the stronger demand for light sweet crude. Mandil: OPEC should build production capacities Beyond increasing their output quotas, Mandil called on OPEC countries to build up their production capacities in the longer term and to “give a clear information and a timetable on their increased capacities in coming months.”
Assistant Secretary Harbert said Katrina had highlighted the need to expand U.S. refining capacity.
“There’s clearly a bottleneck in keeping the market well supplied, and we’re exploring options to improve upon that,” Harbert said.
She declined to say whether the United States would consider including some gasoline in its Strategic Petroleum Reserve — which currently contains mainly crude, with a small quantity of heating oil.
The IEA had called on members Sept. 2 to release mainly gasoline from their strategic stocks, but gasoline accounts for less than one-fifth of the products released.
Many European countries, unlike the United States and Japan, keep strategic stockpiles of gasoline as well as crude, even though gasoline stores are more expensive to maintain.
The balance of crude and refined products in members’ strategic stocks “will be one of the questions that will be discussed with our member countries” when the IEA carries out a “post-mortem analysis” of the oil crisis sparked by Katrina, Mandil said.
| 