IEA "Still Assessing" Oil Market After OPEC Stalemate
Source: Dow Jones, Geraldine Amiel (6/14/11)
"Executive Director Nobuo Tanaka reiterated that the IEA 'stands ready to act' if the market requires additional oil."
The International Energy Agency is in talks with member countries following last week's OPEC meeting and is "still assessing" the oil market situation before considering any potential response, Executive Director Nobuo Tanaka said Tuesday.
Tanaka reiterated that the IEA "stands ready to act" if the market requires additional oil. At the same time, Tanaka, whose organization represents consuming countries, expressed confidence that Saudi Arabia could pump additional oil to meet supplies, he said in an exclusive interview with Dow Jones Newswires. The IEA has authority to coordinate an emergency response of oil from its member governments.
Tanaka's remarks came less than a week after a Vienna POEC meeting concluded in acrimony after members failed to agree to boost output to meet anticipated demand growth.
OPEC split last week on whether to boost output by some 1.5 million barrels a day, a plan favored by Saudi Arabia and some other Gulf producers. Some OPEC members, including Iran, were skeptical additional supplies were needed.
OPEC Secretary General Abdalla Salem Al-Badri said Tuesday that oil prices "will go up for sure" if later this year if the supply gap in many official forecasts comes to fruition. The OPEC official was also quoted as saying high prices will hurt economic growth.
Meanwhile, Tanaka said he was confident Saudi Arabia could use its spare production capacity to put additional oil on the market following the OPEC meeting. Saudi Arabia plans to immediately boost output to as much as 10 million barrels a day.
The IEA warned on May 19 that it was prepared to "consider using all tools" if OPEC failed to boost output, a statement that was seen by producers as a veiled threat that the IEA would tap strategic supplies if OPEC didn't pump more oil.