IEA ready to use government stocks

SINGAPORE – Oil staunched a three-day rout yesterday, but the market remained under pressure from swelling US fuel inventories and the West’s readiness to use emergency stocks if Nigerian or Iranian exports were cut.

US light crude reversed early losses to stand 15 cents higher at US$66 (N$396) a barrel, supported by technical triggers used by speculators, now a major presence in the market. “It’s come up very easily, that’s a sign we’ve got good support at US$65,” said one broker in New York.European Brent crude rose 27 cents to US$64,50.Prices fell US$1,21 on Wednesday after the US government said petrol stocks had risen sharply, recovering from months of below-average levels.Oil also eased after the International Energy Agency (IEA), adviser to 26 industrialised nations, moved to ease concerns about potential outages by saying it was ready to use the 1,5 billion barrels of oil stored in government-controlled tanks.”If there was supply disruption either created by Nigeria, Iran or both, that would lead, no doubt about that, to a stock release from the IEA countries,” Claude Mandil, head of the energy watchdog, told Reuters Television in Davos.The IEA last September ordered its first co-ordinated stock release in 15 years after Hurricane Katrina knocked out US Gulf Coast oil platforms and refineries, a move that helped pull oil prices back from a record high above US$70 a barrel.Oil touched US$69,20 on Monday, its highest since early September, after a four-week rally fuelled by fund investment and fears that intensified violence against oil companies in Nigeria and Iran’s conflict with the West over its nuclear programme could cut output from either major Opec exporter.US petrol inventories rose a surprising 3,2 million barrels last week to 214,8 million barrels, narrowing their deficit against last year to just 1,6 per cent.US petrol prices fell 4,6 per cent on Wednesday, dragging the oil complex lower, and were trading up 0,17 per cent at US$1,6675 a gallon yesterday.With prices riding high, Opec President Edmund Daukoru and Saudi Oil Minister Ali al-Naimi have both said they see little need for Opec to cut output when it meets next week.Signs of a potential easing in the nuclear row between Iran and the West have helped bring down prices this week, with the UN Security Council’s five veto-wielding members – plus Germany – meeting on Monday to discuss a proposed Russian resolution.But dealers remain on alert given fears that the world’s fourth-biggest crude exporter could respond to Western pressure by cutting back its daily oil sales of 2,4 million barrels.-Nampa-Reuters”It’s come up very easily, that’s a sign we’ve got good support at US$65,” said one broker in New York.European Brent crude rose 27 cents to US$64,50.Prices fell US$1,21 on Wednesday after the US government said petrol stocks had risen sharply, recovering from months of below-average levels.Oil also eased after the International Energy Agency (IEA), adviser to 26 industrialised nations, moved to ease concerns about potential outages by saying it was ready to use the 1,5 billion barrels of oil stored in government-controlled tanks.”If there was supply disruption either created by Nigeria, Iran or both, that would lead, no doubt about that, to a stock release from the IEA countries,” Claude Mandil, head of the energy watchdog, told Reuters Television in Davos.The IEA last September ordered its first co-ordinated stock release in 15 years after Hurricane Katrina knocked out US Gulf Coast oil platforms and refineries, a move that helped pull oil prices back from a record high above US$70 a barrel.Oil touched US$69,20 on Monday, its highest since early September, after a four-week rally fuelled by fund investment and fears that intensified violence against oil companies in Nigeria and Iran’s conflict with the West over its nuclear programme could cut output from either major Opec exporter.US petrol inventories rose a surprising 3,2 million barrels last week to 214,8 million barrels, narrowing their deficit against last year to just 1,6 per cent.US petrol prices fell 4,6 per cent on Wednesday, dragging the oil complex lower, and were trading up 0,17 per cent at US$1,6675 a gallon yesterday.With prices riding high, Opec President Edmund Daukoru and Saudi Oil Minister Ali al-Naimi have both said they see little need for Opec to cut output when it meets next week.Signs of a potential easing in the nuclear row between Iran and the West have helped bring down prices this week, with the UN Security Council’s five veto-wielding members – plus Germany – meeting on Monday to discuss a proposed Russian resolution.But dealers remain on alert given fears that the world’s fourth-biggest crude exporter could respond to Western pressure by cutting back its daily oil sales of 2,4 million barrels.-Nampa-Reuters