Energy agency seeks more heating oil to ease tightness

Wednesday, October 4, 2000 By Gillian Handyside

The industrialized world's energy watchdog, the International Energy Agency, today urged oil companies to try to supply more heating fuel to alleviate what it called an unusually volatile market.

But the IEA signaled its members were ready to release strategic reserves only in the event of significant supply disruption, explaining producers were pumping enough crude to meet world demand despite the market's short-term tightness.

"More crude oil is coming to the market," the agency's governing board said after an emergency meeting, referring to supply hikes by the OPEC oil exporter group and non-OPEC Mexico.

"Crude oil available to the market is sufficient to meet current demand, with a small surplus for stock-building," a statement by the Paris-based agency said.

"But because stocks are generally low, and there are some regional imbalances in product stocks, especially heating oil, there is unusual volatility in the short term and current high prices, if sustained, could jeopardize global economic growth."

The governors met to assess the state of the oil market, which has seen crude oil above $30 a barrel for much of the year and helped trigger protests in Europe against high fuel taxes.

Governing board chairman Arne Walther said the governors did not discuss the possibility of releasing emergency IEA oil inventories to cool prices still in the danger zone above $30.

The European Commission said Tuesday that criteria for the release of strategic oil reserves by European Union countries had not yet been met. http://www.enn.com/news/wire-stories/2000/10/10042000/reu_eneoil_32195.asp

-- Martin Thompson (mthom1927@aol.com), October 04, 2000