IEA may put oil stocks on market to reduce prices
Release intended to reduce oil prices, not deal with supply shortage
The International Energy Agency (IEA) is considering whether to add it's oil stocks to the market in a bid to reduce oil prices, according to Reuters.
"The IEA can do what it wants, there is no shortage in the market. If they want to release stocks it will be as a mechanism to bring down prices not to fill any supply shortage," an IEA official, who declined to be named, told Reuters.
The agency, which represents 28 oil-consumer nations, is considering a rare release of emergency reserves if leading Opec member Saudi Arabia cannot pump enough to fill the gap left by the stoppage of Libya supplies.
In its 37-year history the IEA has released stocks only twice to fill lost supplies – in 1990 when Iraq invaded Kuwait and in 2005 after Hurricane Katrina when it released mostly refined products from Europe for the United States.
Saudi Arabia, supported by the UAE and Kuwait, is increasing supplies notwithstanding OPEC's failure to agree a production increase on 8 June.
In the US, the White House said after the Opec meeting the administration was concerned about a lack of supply and that it was keeping the option open to use the 727-million-barrel US Strategic Petroleum Reserve.
The kingdom's crude output is expected to rise by about a million barrels per day from May to near 10 million bpd, industry sources have said.