Energy agency ready to release additional fuel stocks

The head of the International Energy Agency (IEA) said yesterday that the agency remained ready to release additional fuel stocks if required, after Hurricane Rita passed through the US Gulf.

IEA executive director Claude Mandil said it was too early to tell if additional stocks needed to be released, but that the agency was ready to act quickly.

"We are certainly prepared. The members of our agency... are prepared to take a decision very quickly but it is not possible to say today whether a decision is needed or not," Mandil said on the sidelines of the World Petroleum Congress in Johannesburg.

Oil prices fell by around $1 a barrel yesterday after Houston refineries escaped damage from Rita although plants further east in Port Arthur and Lake Charles were hit harder.

The IEA ordered the release for 30 days of 1.3 million barrels per day (bpd) of crude oil and just under 700,000 bpd of oil products after Hurricane Katrina.

Mandil said not all of the crude or all the oil products which had been made available had been bought by the market.

"They are all available but not all of them have been delivered, so for the time being we do not see any need - as far as Katrina is concerned - to extend but just to repeat that barrels are available."

"Not all the crude and not all the product has been delivered," he added.

Mr Mandil said Katrina and Rita had highlighted a shortage of global refining capacity, which he said was a major bottleneck in the oil market, contributing to higher prices.

He said oil companies needed to invest more to boost refining capacity and to improve their ability to handle heavier crudes.

And he questioned firms' assessments that the outlook for refining margins was not yet sufficiently attractive to justify adding large amounts of refining capacity.