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The IEA consulted Saudi Arabia, China and India before it approved the release of 60M barrels of...

The IEA consulted Saudi Arabia, China and India before it approved the release of 60M barrels of its emergency reserves, the agency's executive director says. Nobuo Tanaka adds that the release is meant to fill the gap in supply until higher crude volumes from Saudi Arabia reach the market.
Comments (34)
  • One way to think about it is 60 days of lost Libyan supply at a million per day rate...
    26 Jun 2011, 08:19 AM Reply Like
  • This will brings the classic debate about the saudis not having spare capacity. Remember that according to them, they were going to raise 1,8M barrels a day in July and now EIA went to market to throw 2M a day.
    26 Jun 2011, 08:43 AM Reply Like
  • Did they place a few bet in the futures markets with this info ?
    26 Jun 2011, 08:46 AM Reply Like
  • Hells yeah they did. Just need to look at the volume. That was the mistake of how the IEA did this. Barack should've just come out and said, we will periodically be selling oil at opportunistic times - that would've been enough, imo, to send a lot of the specs running. Something nice around 103 to really kick them in the jewels.
    26 Jun 2011, 11:35 AM Reply Like
  • They did:


    But read the last line of the article and this insider trading is clearly going to be blown off by the CFTC.
    26 Jun 2011, 12:38 PM Reply Like
  • The other way to look at it: The current administration wants to have short term drop in oil before elections at the cost of burning 2M/bbl a day.
    26 Jun 2011, 09:08 AM Reply Like
    26 Jun 2011, 09:08 AM Reply Like
  • Good article. In addition to the authors recommendations on PM's and oil I suggest nuclear power could be a winner as oil becomes more scarce.


    Many do not realize how much oil is consumed (wasted?) in developing nations running generators for electricity. Small low cost and safe nuclear plants (yes, they can be safe) would be a blessing for developing nation infrastructure and reduce CO2 at the same time. This would lift much of the demand load off producers.


    The entire country of Nigeria, for example, generates only enough electricity for supply a moderate sized city. Most get by with intermittent or no electricity and a generator. MTN, a telephone network, has to provide a backup generator at every tower in the country along with a guard to watch it !


    It's a pity the hysteria over nuclear has been re-fueled by Japan's experience with ancient and poorly designed systems. Nuclear has an almost unblemished safety record while fossil fuels, particularly coal, kill so many yearly and contribute to what may be catastrophic climate change.
    26 Jun 2011, 09:33 AM Reply Like
  • The problem with nuclear is that when the truth is finally revealed (in spite of the media blackout) about the severity of the continuing fallout from Fukushima and the problems with 2 Nebraska facilities, the American people might react just as Merkel did in Germany, and say "no more". The power and fat wallets of the nuclear industry have managed to keep a lid on the numerous problems relating to the 40+ year old GE designed facilities which represent a majority of those plants that still operate in the US.
    26 Jun 2011, 10:43 AM Reply Like
  • I'm surprised that there has not been a lot of hand wringing over the 'danger' to the environment of our (and others) nuclear powered naval fleets. Just because we haven't had a problem is not reason to not worry about what would happen if an errant asteroid hit one of our nuclear ships.:-(
    26 Jun 2011, 01:05 PM Reply Like
  • With regard to:


    "The entire country of Nigeria, for example, generates only enough electricity for supply a moderate sized city. Most get by with intermittent or no electricity and a generator. MTN, a telephone network, has to provide a backup generator at every tower in the country along with a guard to watch it !"


    And since you don't seem to mind links take a look here:

    26 Jun 2011, 09:50 AM Reply Like
  • My bad, kmi, but, a few points on a good article:


    The rising costs of silver are reported to be causing stress in the industry although substitutes will likely be found.


    I work in Africa, and have solar, and am aware of the effort and time required to keep panels clean and theft proof. It's much easier flicking a switch, believe me.


    Nuclear is far too easily demonized. I leave the arguments to others but again point out, actual deaths from nuclear are very few and far between. Even the famed green advocate, author of Gaia, now swears by it as the only way to save the planet from catastrophic pollution from fossils.


    And, for years I lived within walking distance of a nuclear plant, still operating, and used to enjoy swimming in the warm waters of the cooling system during winters.


    And, from my experience with solar and developing nations but never being in Bangladesh I'd still bet most of those customers mentioned in your link are on a tiny panel and a flickering, temperamental Chinese lightbulb with which they fiddle a lot.
    26 Jun 2011, 12:48 PM Reply Like
  • it was a good move and needs to be repeated. the Brent market is out of hand and the traders need to be brought into line. why not just raise the margin requirements? but this was a good move.
    26 Jun 2011, 11:46 AM Reply Like
  • To fix oil prices stop Goldman from manipulating the price. Oil will go back to $60.
    26 Jun 2011, 12:00 PM Reply Like
  • How do you got $60? What about emerging markets middle class resurgence? Do you now that the China's government granted a 20% raise on wages?


    Demand would outpace supply in July, right when the IEA comes with this reserve drawdown....


    Live in Denial, if you want:

    26 Jun 2011, 12:38 PM Reply Like
  • Crude oil margin requirement should be as high as for stocks: 50%.
    26 Jun 2011, 12:17 PM Reply Like
  • Speculation in commodities markets is inevitable in the wake of ZIRP. The major market manipulator is the Fed. Central planning distorts markets except in the minds of utopian regulators.
    26 Jun 2011, 12:23 PM Reply Like
  • That's what the world needs......nukes in Nigeria. Three highly advanced countries have had Nuke accidents two with catastrophic consequences. I'm sure a backward society like Nigeria could adequately manage nuclear power plants.


    The other side of the coin? With the cost of constructing, running, managing, and disposing of waste what it is, you could blanket the entire country with PE Cells (perhaps an exaggeration) and they wouldn't be able to hurt themselves or anyone else. Additionally they are geographically located for just such an approach.


    Vuke - "Nuclear is far too easily demonized."


    The reason nuclear is so easily demonized is it simply isn't safe enough yet. And it simply isn't economical enough when other options are explored and all cost factors taken into account. Additionally, neither the industry nor government regulate and inspect plants satisfactorily. Three Mile Island scared the crap out of us, Chernobyl contaminated parts of Europe, and we don't even know how bad Japan is yet. Suffice it to say, it's BADDDDD. 60 years of Nuclear power and we still don't have adequate means of storage for nuclear waste and probably won't for a long time. Currently waste is stored within the reactors like in Japan and it provides excellent fuel and contaminants when a reactor melts down.


    Having said all of that, I am not opposed to nuclear power. It should be implemented on a limited basis, and a lot of money should be put into basic research into ways of making it safer and more cost effective. We're just not at a point for massive implementation.


    To be frank, I'm not sure how our Naval nuclear fleet is managed. I can tell you that there is no profit motive involved and virtually unlimited resources for designing, managing, running, inspecting and maintaining these complex systems. Something the private sector can't and will never do without the resources of the federal government behind them. And we all know that we don't want big government in our business now do we?????
    26 Jun 2011, 02:55 PM Reply Like
  • i'll never understand how people support nuclear when accident sites are permanent, costs are perpetual, and the half life of the fuel is as long as the history of Man.


    There are thousands of solutions to any real or imagined energy crisis nuclear is hardly one of them.


    That said, i suspect dealing with finicky power is better than having none at all, much like my internet service in certain areas....
    26 Jun 2011, 03:43 PM Reply Like
  • Look, kmi, you know we're not going back to kerosene lamps and candles and I can assure you solar and wind, although appearing simple, are anything but.


    Read what some very knowledgeable people have say and consider.


    And, Archaean plutons have not moved in a billion+ years. Drop your nuclear waste in a shaft drilled in one of these.
    26 Jun 2011, 07:26 PM Reply Like
  • Right, keep those Nigerians without air conditioning and in the dark. Or, dusting off solar panels.


    If you do a little reading on the subject you'll discover 3rd and 4th generation plants that are small and virtually terrorist proof. And, there are reactors in Africa that have been running, quite capably, for years. Do you have any idea how many panels, working perfectly, and batteries are required to run a single A/C in real heat?
    26 Jun 2011, 07:32 PM Reply Like
  • Vuke, i remember when in a country in which I resided not that long ago solar hot water was popular. I also remember the advent and widespread adoption of cheap imported natural gas, and how folks told me they preferred it cause, well, it was convenient.


    Well, that country is now experiencing a fiscal crisis, the gov't has jacked up taxes on all energy, and the vuys with the solar systems are sitting pretty.


    Please don't walk down Self Righteous ave and ask me to grab a coffee at Info-bucks, cause I been in town for a while now, thanks.


    Africa isn't hitting the per capita kwhour usage Americans do anytime soon, and it makes no sense subjecting them to the errors of our pasr.
    26 Jun 2011, 08:55 PM Reply Like
  • Kmi, I like your spirit but feel it is misdirected. Nuclear is simply not as fearsome as you describe, nor does it actually kill people. Coal does, in unbelievable amounts however, And, environmental damage from deep drilling and fracking is going to be very, very troublesome, never mind the global warming aspect.


    Solar works on a small scale but is not practical for serious industrialization. Think of the batteries produced and exhausted. What to do with them?


    And, when the rainy season hits in Africa, turn off the power for a day or two? You need consistent and reliable energy to build industry, air condition homes and offices in horrendus climates and, hopefully, some day power autos about town.


    It's not righteousness that drives the argument. It's a conviction, developed through experience and a study of nuclear physics that convinced me to adopt an unpopular concept. That, and seeing children die from lack of clean water that could be pumped were electricity available. How do you think Floridians would live if cheap electricity were not available?


    Not to labor a point but read on the new, compact and safe reactors and imagine how they could transform life for hundreds of millions, reduce oil consumption and help clean the planet's air and watercourses. Don't put them in range of tsunami's or earthquake zones however, even though we're now assured fail safe mechanisms exist for even that. And, consider Lovelocke's warnings seriously. There may not be time for alternatives.
    26 Jun 2011, 09:26 PM Reply Like
  • Vuke, thanks I have read up on new tech nuclear but I find other emerging tech far more intriguing. You perhaps see a future in compressor driven a/c units and industry fed by nuclear power, where my vision is of lower power devices generating equivalent experiences with significantly less draw, absorption chiller cooling, piezoelectric generation...


    By the way i live near a nuclear plant expected to be decomissioned and in the tradition of the US w/ no viable backup plan for replacing its power. Do I want to see it decommissioned? No, of course not, it would be silly to expect alternatives to cover that in such a short time span, but for developing nations, for the future? Why not.
    26 Jun 2011, 09:45 PM Reply Like
  • "No, of course not, it would be silly to expect alternatives to cover that in such a short time span, but for developing nations, for the future? Why not. "


    That's the nub of it. Developing nations are ready NOW and don't want to wait 30 years for new technology to emerge. They desperately need electricity for hospitals, clean water, lighting and improved infrastructure. Death rates, particularly among children, are startling. Would you, living under such circumstances, be happy being told their is no hope for you and your children for a better life for at least a generation or two?


    Electicity will bring more development, industry, jobs and tourism and, of course, stability, to many of these countries. Small and safely designed reactors are now being readied for this very eager market.


    And, perhaps most compelling, if the west doesn't do it, the east will. Check out pebble bed reactors in China, (not fully proved as yet) and the small container reactors (non weaponizable) being developed in the U.S. The east may not be so concerned with safety issues.
    27 Jun 2011, 08:16 AM Reply Like
  • Vuke I don't want to beat this to death. I've explored nuclear, but I've looked at everything else from hydrogen and natural gas combined-heat-power gens, new tech evaporative cooling (from companies like Coolerado), microhydro, solar, wind etc. I did this in the process of evaluating best ROI for my own property.


    There is phenomenal work being done not just in nuclear, but everywhere else at the same time. For every breakthrough in nuclear I'd propose there are equivalent ones in other technologies.


    I think your position is fair and informed, I just don't agree with it.
    27 Jun 2011, 10:38 AM Reply Like
  • I'll add the following to my above comment, clean energy news from just this week:



    27 Jun 2011, 11:37 AM Reply Like
  • Watch over the next 1-2 weeks as oil rises right back to the price ($94) it was before the president's announcement. Then when we realize the SPR now needs to be replenished, we can ask ourselves, 'why was the point?'
    26 Jun 2011, 03:58 PM Reply Like
  • consulted Saudi Arabia, China and India
    why would anybody be against USA release of oil
    26 Jun 2011, 05:20 PM Reply Like
  • It wasn't just the USA. Saudi Arabia sells it for a living, so they have to be appeased. China and India, probably to make them promise not to stockpile 2MM barrels a day??
    26 Jun 2011, 05:58 PM Reply Like
  • I don't know why Saudi Arabia as a producer should go along with a proposal that reduces the price of the (only) commodity that they sell. I guess if they don't go along, the royal family protection will be withdrawn and what is happening in the rest of the middle East would repeat there too. The Bahrain royal family is also getting propped up (because we have our naval presence there).
    26 Jun 2011, 06:07 PM Reply Like
  • Ohrama
    why Saudi Arabia
    reserve releases is a temp. inconvenience for them,
    while strategic reserve depleted is their future opportunity
    26 Jun 2011, 06:16 PM Reply Like
  • Saudis are fighting demand destruction that accompanies oil at these levels. They want to sell to your great grandchildren as well as to you.
    26 Jun 2011, 08:57 PM Reply Like
  • The Saudis definitely are the only OPEC guys who understand their long term interests.


    US release of oil wasn't as important as the release in Europe. Brent is where the supply issues are. The $20 spread between WTI and Brent tells you that. Unfortunately gasoline prices in US are affected more by Brent than WTI. Does no good to lower oil prices without lowering gasoline prices. I was wondering what Obama could do (since he had talked about going after the specs a few months ago) - because he can't touch Brent. Guess IEA did it for him
    27 Jun 2011, 01:51 AM Reply Like
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