The International Energy Agency (IEA) will for the time being refrain from releasing further strategic reserves into the market, but stresses the need for vigilance over future supply from Libya and Opec members.
The agency, which represents the 28 most prominent crude consuming countries, started to release 60 million barrels of crude on 23 June under the Libya Collective Action programme to compensate for the loss of Libyan exports.
After completing a 30-day review of the action, the IEA has decided not to add to this number.
“While we are not now seeking the release of additional stocks, the action is not yet complete as stocks are still entering the market,” it said in a statement.
In addition to the reserves still flowing into the market, increased output from Opec members is compensating for the loss of Libyan production. According to IEA estimates, Opec production rose by 840,000 barrels a day (b/d) to 30.03 million b/d in June, and could rise by a further 150-200,000 b/d in July.
Gulf oil producing countries had defied opposition in the Opec ranks by increasing production in June in response to the Libya crisis and fears that rising oil prices would impair the global economic recovery.
“The IEA estimates that higher Opec production and the Libya Collective Action should substantially cover the expected 1.3 million b/d increase in the third quarter 2011 ‘call on Opec crude and stock change’,” adds the statement.
At the same time, the agency does not openly rule out the possibility of further releases in future.
“A number of uncertainties remain, which demand vigilance, notably the duration of the Libyan disruption, the future evolution of Opec supply, as well as the final impact of the stock release itself,” it says.
The provision of light-sweet crude from the US Strategic Petroleum Reserve has improved refining margins, says the agency, and helped reduce the risk off a potential fuel supply crunch during the peak driving season in the US later this year.