Original post: Very strange stuff happening.Oil is plunging and right now there’s an “urgent” IEA press conference about to start. Nobody knows what it’s about.
We’ll cover accordingly.
Chief Nobuo Tanaka is expected to speak…
Update: The IEA has announced plans to release 60 million barrels of oil in the coming months to assuage supply concerns related to Libya.
30 million barrels are coming from the US Strategic Petroleum Reserve.
Oil continues to get killed this morning, and is now zooming towards $90.
And here’s the full press release
PARIS, 23 June 2011 – International Energy Agency (IEA) Executive Director Nobuo Tanaka
announced today that the 28 IEA member countries have agreed to release 60 million barrels of oil in the
coming month in response to the ongoing disruption of oil supplies from Libya. This supply disruption
has been underway for some time and its effect has become more pronounced as it has continued. The
normal seasonal increase in refiner demand expected for this summer will exacerbate the shortfall
further. Greater tightness in the oil market threatens to undermine the fragile global economic recovery.
In deciding to take this collective action, IEA member countries agreed to make 2 million barrels of
oil per day available from their emergency stocks over an initial period of 30 days. Leading up to this
decision, the IEA has been in close consultation with major producing countries, as well as with key non-
IEA importing countries.
The IEA estimates that the unrest in Libya had removed 132 mb of light, sweet crude oil from the
market by the end of May. Although there are huge uncertainties, analysts generally agree that Libyan
supplies will largely remain off the market for the rest of 2011. Given this loss and the seasonal increase
in demand, the IEA warmly welcomes the announced intentions to increase production by major oil
producing countries. As these production increases will inevitably take time and world economies are
still recovering, the threat of a serious market tightening, particularly for some grades of oil, poses
an immediate requirement for additional oil or products to be made available to the market. The IEA
collective action is intended to complement expected increases in output by these producing countries, to
help bridge the gap until sufficient additional oil from them reaches global markets.
“Today, for the third time in the history of the International Energy Agency, our member countries have
decided to release stocks.” Mr. Tanaka said. “I expect this action will contribute to well-supplied markets
and to ensuring a soft landing for the world economy.”
Total oil stocks in IEA member countries amount to over 4.1 billion barrels, and nearly 1.6 billion barrels
of this are public stocks held exclusively for emergency purposes. IEA net oil-importing countries have
a legal obligation to hold emergency oil reserves equivalent to at least 90 days of net oil imports. These
countries are holding stock levels well above this minimum amount, currently at 146 days of net
The IEA Governing Board will within 30 days of this notice reassess the oil market, review the impact of
their coordinated action and decide on possible future steps.
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