Added by Gary Dunn on August 17, 2012
The executive director if the International Energy Agency says there’s no reason to release oil from the US Strategic Petroleum Reserve while countries’ views vary.
The International Energy Agency’s executive director said the oil market has enough supply – in contrast to other key members of the IEA who favor the use of strategic reserves around the world to influence prices and encourage economic growth.
Countries like Japan and South Korea agree with the International Energy Agency’s executive director.
“Stock releases are useful when oil supplies are not sufficient to meet demand, but oil supplies are sufficient now,” said a Japanese official.
Britain and France say they are open to discussing the potential release of their reserve oil supply to prevent the price of energy rising, which may undermine sanctions recently imposed against Iran.
Mid-day trading of Brent crude recovered to $113.80 per barrel on the IEA’s executive directors after foaling below $113 per barrel when the news spread of the US possibly considering releasing oil from its Strategic Petroleum Reserve.
The US Strategic Petroleum Reserve is currently the world’s largest emergency supply at 695 million barrels of oil — about 36 days supply based on the US current consumption of 19.5 million barrels per day. The SPR is a reserve of crude petroleum — it does not stockpile any refined petroleum fuels like gasoline, kerosene, or jet fuel. Suggestions to the US Department of Energy about stockpiling gasoline and jet fuel have been made with some officials saying the DOE may consider stockpiling refined fuels as part of a possible expansion to 1-1.5 billion barrels. The capacity of the SPR is 727 million barrels.
The last non-emergency sale of oil from SPRs around the world occurred in early 2011, during the Arab Spring political uprising. Approximately 60 million barrels of oil were involved in the sale.