Sales of emergency oil stocks began in Europe on Wednesday, as part of a plan by consuming nations to cool prices, but traders complained about confusing signals from different countries and industry lobbies warning of price spikes.
The West's energy watchdog, the International Energy Agency, shocked energy markets last week by announcing the release of 60 million barrels of oil and products to compensate for the loss of Libyan crude. The aim was to prevent high oil prices from hitting a fragile economic recovery.
In the United States, strategic petroleum reserve (SPR) officials were in daily contact with market participants to explain how 30 million barrels of public oil stocks would be released. In Europe, however, which suffered most from the loss of Libyan oil, the process looked less organized.
Germany became the first European country to launch tenders, and the Netherlands was expected to follow suit. But, the IEA said, its breakdown of the release of 19.2 million barrels of public and industrial oil and products by individual European country could still change.
"The bottom line is that we don't know how the breakdown will appear, and the numbers we have put in the table are preliminary and have probably over-exaggerated the weight of products," the agency's head of energy markets and security, Didier Houssin, told Reuters....MORE