Repeat of IEA oil release not ruled out

Written by The Financial Times | Updated: Jun 30 2011, 05:49am hrs
By David Blair and Energy Correspondent

The International Energy Agency could repeat its decision to release strategic oil reserves when the present 30-day draw down concludes, according to the organisations chief.

Nobuo Tanaka, director of the IEA, told a Financial Times energy conference on Tuesday that the oil market would be reassessed at the end of the agreed period for the current release of 2m barrels per day.

Asked whether the IEAs board could decide again to draw on reserves, Mr Tanaka said: Its possible, if we need to.

He added: Our current decision is: lets do it for 30 days and see how the situation goes.

The IEA chose on June 23 to use the stockpiles held by its member states for only the third time in the agencys 37-year history. Mr Tanaka said this decision was necessary because of the loss of Libyan production, which he said had deprived the market of a net 1.4m b/d, and the imminent return to service of many of the worlds refineries after a period of routine maintenance.

Mr Tanaka acknowledged that Saudi Arabia was increasing its own oil output because of these factors. But he said this would take several weeks and the IEAs move was designed to fill the gap. Mr Tanaka noted that 1.6bn barrels were held in reserve by the organisations members. If we dont use it now, then when he asked.

But Abdalla El-Badri, secretary-general of Opec, has criticised the release of reserves, saying that it was done for commercial reasons, rather than the need to avert a genuine shortage of supply

The Financial Times Limited 2011