(Reuters) - Developed nations are unlikely to release more oil on to the market in coming days, a month after the first release failed to curb oil prices to help protect the global economic recovery, officials and analysts said.
The energy watchdog for industrialized nations, the International Energy Agency, shocked oil markets last month by announcing a release of 60 million barrels of oil and products to offset the loss of Libyan production.
The release -- only the third in the agency's history -- came after OPEC oil producers failed to agree on the output increase and led to a sharp correction in oil prices but they returned to their pre-release peaks since then.
Analysts, who were initially quick to cut their oil price estimates for this year, have since become more skeptical about the impact of stocks releases.
On Wednesday, officials in some European countries said they remained opposed to further intervention for now.
"The measure doesn't convince us but in the end we won't oppose it," Junior Industry Minister Stefano Saglia told Reuters. "You just need to see what happened, as soon as the reserves were built up, prices rose again."
He said though the country would not formally oppose any decision.
A unanimous decision by all 28 IEA members is required for a release and the IEA repeated on Wednesday it was "reviewing with its member countries the impact of the collective action announced on June 23."
"The word from Berlin is that there won't be a second release," Platts news agency quoted Germany's National petroleum stockpiling agency (EBV) as saying. "There is a 90 percent chance the IEA won't do a second release," Eberhard Pott, EBV's board director, said.
The comments follow a statement by France's Energy Minister Eric Besson on Tuesday who said there were no plans for now for a coordinated second release emergency oil stocks.
J P Morgan analysts said on Wednesday a second release would be politically much harder to achieve than the first one and would only be triggered by oil prices higher than they are now.
Brent on Wednesday climbed above $118 a barrel compared to $114 the day before the first stocks release was announced.
"Further, the data to justify a second release will not be compelling for a few months, and given fall (autumn) refinery maintenance, a further release would be unlikely before September," said Lawrence Eagles.
He said he believed the best option for the IEA would be to extend the duration of the first release by 30 days since a lot of stocks from it had yet to be sold.
He also said it would make sense for the agency to recommend a timetable for replenishing inventories thereby facilitating the use unsold stocks through the lowering of mandatory stock holding obligations.
by Dmitry Zhdannikov and Emma Farge
Source: www.reuters.com
The energy watchdog for industrialized nations, the International Energy Agency, shocked oil markets last month by announcing a release of 60 million barrels of oil and products to offset the loss of Libyan production.
The release -- only the third in the agency's history -- came after OPEC oil producers failed to agree on the output increase and led to a sharp correction in oil prices but they returned to their pre-release peaks since then.
Analysts, who were initially quick to cut their oil price estimates for this year, have since become more skeptical about the impact of stocks releases.
On Wednesday, officials in some European countries said they remained opposed to further intervention for now.
"The measure doesn't convince us but in the end we won't oppose it," Junior Industry Minister Stefano Saglia told Reuters. "You just need to see what happened, as soon as the reserves were built up, prices rose again."
He said though the country would not formally oppose any decision.
A unanimous decision by all 28 IEA members is required for a release and the IEA repeated on Wednesday it was "reviewing with its member countries the impact of the collective action announced on June 23."
"The word from Berlin is that there won't be a second release," Platts news agency quoted Germany's National petroleum stockpiling agency (EBV) as saying. "There is a 90 percent chance the IEA won't do a second release," Eberhard Pott, EBV's board director, said.
The comments follow a statement by France's Energy Minister Eric Besson on Tuesday who said there were no plans for now for a coordinated second release emergency oil stocks.
J P Morgan analysts said on Wednesday a second release would be politically much harder to achieve than the first one and would only be triggered by oil prices higher than they are now.
Brent on Wednesday climbed above $118 a barrel compared to $114 the day before the first stocks release was announced.
"Further, the data to justify a second release will not be compelling for a few months, and given fall (autumn) refinery maintenance, a further release would be unlikely before September," said Lawrence Eagles.
He said he believed the best option for the IEA would be to extend the duration of the first release by 30 days since a lot of stocks from it had yet to be sold.
He also said it would make sense for the agency to recommend a timetable for replenishing inventories thereby facilitating the use unsold stocks through the lowering of mandatory stock holding obligations.
by Dmitry Zhdannikov and Emma Farge
Source: www.reuters.com
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