Nations plan to release crude from strategic stockpiles to USA

06-Sep-05

As the US oil industry struggles to recover from Hurricane Katrina, industrialized nations plan to release 60 million barrels of crude from strategic stockpiles to USA. Oil prices dropped as the markets experienced relief. In Singapore, light crude oil for October delivery scaled down to US$66.60 a barrel in electronic trading on the New York Mercantile Exchange. Two US facilities restarted and flows of crude oil improved enough to allow refineries in the Gulf Coast and Midwest to mount production. However, 4 damaged Gulf Coast refiners (5% of US capacity ) look likely to remain shut in the near future. An interesting fact to note is that this is just the beginning of the hurricane season in USA, which peaks between mid-September and mid-October. Could this mean more storms and more damage? The 26 members of the International Energy Agency (including Japan), plan to draw on 2 million bpd of oil over the next 30 days to help offset the loss of output and refining capacity in the US caused by Hurricane Katrina. In Japan, the government revealed plans to release to the oil market, some of its strategic oil reserves held by refiners- totaling to about 200,000 bpd of crude oil and refined products. However, the government has no plans to release any government-controlled crude oil stocks. Venezuela is to follow through on its offer to send 1 million barrels of gasoline to the United States as soon as possible to help victims of Hurricane Katrina.