21 July 2011 15:39 [Source: ICIS news]
LONDON (ICIS)--International Energy Agency (IEA) nations are ready to release oil stocks again if market conditions warrant, the IEA said on Thursday, although it sees no current need to do so.
It is 30 days since IEA member countries agreed to release 60m barrels of oil from reserves, which included 30m barrels from the US Strategic Petroleum Reserve, to alleviate expected physical market tightness in the wake of the Libya uprising.
The IEA’s 30-day review of its ‘Libya collective action’ concludes that the releases “served a market need by adding liquidity and bridging the gap to additional supplies from OPEC countries”. The Action is not yet complete, it added, as stocks are still entering the market.
“Market appetite for the government stocks made available has been greater than during the Hurricane Katrina Collective Action in 2005, and the measure has largely achieved its aims to date,” it said.
Sweet-sour crude differentials have narrowed overall, making it more economic for refiners to process light sweet crudes, the tightness of which has diminished.
There was a danger that refinery activity could have been suppressed during the summer months leading to a possible supply crunch of refined products later in the year.
There has also been a sharp rise in OPEC production, the IEA said.
IEA estimates suggest that OPEC crude production was 30.3m bbl/day in June, 840,000 bbl/day higher than in May, and could have risen by a further 150,000-200,000 bbl/day in July.
Increased OPEC production and the release from reserves “should substantially cover” the expected 1.3m bbl/day shortfall expected in the third quarter of 2011, it added.
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