The IEA, adviser to 28 industrialized countries, on June 23 said it would release 60 million barrels of oil from strategic inventories to fill the gap in supplies left by the disruption to Libya’s output.
“We’ve had a fairly successful apparent level of uptake for the SPR release in the US,” said David Fyfe, head of the IEA’s Oil Industry and Markets Division, on a conference call for journalists.
“We would hope a very sizeable proportion of this will be taken up.”
The US sold more than 30 million barrels of crude from the Strategic Petroleum Reserve (SPR), all of the oil on offer, the Department of Energy said on Friday.
But demand has proved lackluster for sales in some IEA countries, such as Germany. Other countries such as the UK are making supplies available by reducing the obligation to hold stocks rather than direct sales of stored oil.
Germany has sold 63 percent of the total 4.2 million barrels of crude and oil products it put up for sale, German state stockpiling agency EBV said on Monday.
An EBV spokesman described the level of interest in the sale as “restrained.”
Oil prices at first fell sharply as a result of the IEA’s action but were trading around $112 a barrel on Monday, close to where they were before the IEA announced the move.
Asked to judge the success or failure of the move, IEA officials on the conference call said the stocks release had had boosted supplies of high-quality crude that have been reduced by the conflict in Libya.
“There are some significant factors beyond the absolute value of the barrel, which is the improvement in refining margins that we’ve seen and a less tight differential between light and heavy crude, which clearly shows that (for) light, sweet crude — for which the Libyan disruption was a key problem — we have seen a clear improvement,” said Didier Houssin, director of energy markets and security at the IEA.
Fyfe said the release of light, sweet crude in the United States could reduce the need for US imports, meaning more crude could head to Asia, which is driving the increase in global oil demand.
The stocks release is only the third in the IEA’s history. Its last such move was in 2005 in the wake of Hurricane Katrina’s disruption to US supplies.
“The experience previously from Hurricane Katrina was good. The initial signs from the US this time around are looking good,” Fyfe said.
Other countries are preparing to offer their share of the 60 million barrels.
The IEA said on the call Turkey’s contribution of about 1 million barrels would be sold by Turkish refiner Tupras and the oil will be available probably later in the week.
