HOUSTON - The International Energy Agency hasn't been contacted by the U.S. government about a potential release of emergency oil stockpiles, and market fundamentals don't warrant a release, IEA Executive Director Maria Van Der Hoeven said Friday.
"The market is sufficiently supplied," Ms. Van Der Hoeven told reporters after a presentation at the Baker Institute. "There is no reason for something like that." The official said that the agency hadn't been contacted by the U.S. or other IEA members about potential stockpile releases.
IEA members normally communicate to the agency decisions about using emergency stocks of oil. Reuters reported Thursday that the U.S. was considering dusting off plans for the potential release of strategic inventories in the case of a price crunch after the end of the summer driving season.
Ms. Van Der Hoeven said that the IEA was continuously monitoring markets, and evaluating the impact of events such as maintenance in the North Sea and Iran sanctions. But when "there's no disruption of supply there's no reason for IEA to be involved."
The IEA's top official said she visited the Eagle Ford shale in South Texas, the scenario of a large boost in unconventional oil production that's transforming the U.S. energy industry. She said that the surge in unconventional light oil was already impacting global oil markets; but that the U.S. would likely remain an importer of crude, especially as Gulf Coast refiners have invested billions in the capacity to process heavy crude from Canada and overseas.
"Overall markets will remain interdependent," Van Der Hoeven said. But she added that "we cannot ignore that a shift is occurring," and that rising U.S. production will "have implications for producers both OPEC and non-OPEC."
The industry and regulators, however, must address environmental and social concerns in order for the unconventional oil and gas boom to continue in the U.S. and take root elsewhere. "The risks are real that public sentiment will derail these technologies," she said. Ms. Van Der Hoeven added that there's a delicate balance between overly permissive and overly strict regulation that must be found.
Copyright (c) 2012 Dow Jones & Company, Inc.
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