Tags: IEA | oil | Saudi | US

IEA: Oil Market Well Supplied on More Saudi, US Crude

Thursday, 20 Sep 2012 07:06 PM

The oil market is sufficiently supplied and additional crude is coming from Saudi Arabia, Canada and the U.S., according to the International Energy Agency’s executive director.

“The oil stocks are there for an emergency and that’s not directly related to prices,” Maria van der Hoeven said Thursday in Madrid. “We are keeping an alert eye there.”

West Texas Intermediate crude dropped more than 7 percent this week as Saudi Arabia said it was taking action to bring prices down by pumping near the highest in three decades. Speculation that central banks in the U.S. and China would enact stimulus measures combined with tension over Iran’s nuclear program pushed the U.S. benchmark to a four-month high of $100.42 on Sept. 14. The Group of Seven nations said last month that strategic stockpiles may need to be tapped to curb prices.

WTI traded at $91.71 a barrel at 2:24 p.m. London time on the New York Mercantile Exchange. Brent oil also declined about 7 percent this week and was at $108.70 on the ICE Futures Europe exchange, while a basket of crudes produced by the Organization of Petroleum Exporting was priced at $108.43 yesterday, according to data from the organization.

Ideal Price

Saudi Arabia, the world’s biggest crude exporter, is producing about 10 million barrels a day and will export more if customers demand it, a Persian Gulf official with knowledge of the matter said Sept. 18. The ideal price for OPEC is $100 a barrel and current prices are not supported by the fundamentals, the official said, declining to be identified because he’s not authorized to speak publicly.

U.S. oil production rose 12 percent to 6.26 million barrels a day in June compared with 5.57 million a year earlier, Energy Department data show. Canadian output will climb 28 percent to 3.85 million barrels a day in 2015 from 3.02 million last year, the Canadian Association of Petroleum Producers said in June.

Tapping the nation’s emergency stockpile release is something that the U.S. said this week it was considering to ensure high prices don’t crimp the global economy.

President Barack Obama’s administration welcomed Saudi Arabia’s “continued commitment to take all necessary steps to ensure that the market is well supplied and to help moderate prices,” Jay Carney, the White House spokesman, said Sept. 18. The U.S. is the world’s biggest oil consumer.

“The oil market is sufficiently supplied,” van der Hoeven said. “Saudi Arabia is bringing more oil to market as they have promised. We can see that Canada and the U.S. are bringing more oil to the market and making a difference.”

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The oil market is sufficiently supplied and additional crude is coming from Saudi Arabia, Canada and the U.S., according to the International Energy Agency s executive director.
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