IEA Already Considering Extending Oil Release Period, Fireselling More Crude To China

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Thu, 06/30/2011 - 09:04 | 1415044 lizzy36
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When they  say "extend the release" do the mean "ADD" to it, or merely extend the time the initial release could be taken up?

Thu, 06/30/2011 - 09:07 | 1415077 FrankIvy
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I thought about this too, but I'm ambivalent as to whether it was an odd choice of words or an intentional choice of words.

My best guess is that they are contemplating a Release II, but they don't want to call it that, and so they came up with "extension," to make it seem like less of a second dumping so shortly after the first dumping, which might suggest that the first dumping was a failure, and even more pulling on the knot in a misguided attempt to loosen it.  Or an outright move to kick the can down the road, as they must know that oil supply constraints are the root of the problem.

Thu, 06/30/2011 - 09:15 | 1415103 mayhem_korner
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I think they really mean "extended release," as their twice-a-day SSRI's don't seem to be cutting it...


Thu, 06/30/2011 - 10:03 | 1415304 BorisTheBlade
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The International Energy Agency could decide by mid-July whether the release of strategic oil reserves needs to be extended for a month or two, an official said.

I suppose it means that they intend to add some uncertainty into language so as to create more flexibility in interpreting what they said going forward.

Thu, 06/30/2011 - 09:04 | 1415045 dcb
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It makes me insane that the answer is not to blame monetary policy for the price spike, and to release oil from reserves to counter the monetary policy. It seems th elite will take any tactic to make sure they avoid actually having to deal with the cause of something and instead try to deal with the effects. this of course makes the situation worse in the long run

Thu, 06/30/2011 - 09:12 | 1415080 Confused
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Agreed. This move is strange. There has to be more to it than just "trying" to keep the price of oil down. Long term consequences of these moves are much worse. Perhaps I'm wrong.

Thu, 06/30/2011 - 09:15 | 1415088 qussl3
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Bribing China to bail out EZ? Very unlikely tho.

More likely covering up for Japan having already run through their SPR maybe?


Thu, 06/30/2011 - 09:23 | 1415141 centerline
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It's called being broke.  Cash flow is a bitch when your credit card is frozen.  Got to sell some black gold to afford the next 8-ball.

Thu, 06/30/2011 - 10:31 | 1415427 gorillaonyourback
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 Peak oil is a bitch


Crude oil futures extended gains on Wednesday, climbing to a one-week high after a government report showed that U.S. crude oil inventories fell significantly more-than-expected last week, easing concerns over a slowdown in demand from the world’s largest consumer.

On the New York Mercantile Exchange, light sweet crude futures for delivery in August traded at USD94.53 a barrel during U.S. morning trade, jumping 1.85%. 

It earlier rose as much as 2% to USD94.72 a barrel, the highest price since June 22. 

The contract traded at USD93.85 prior to the release of the EIA data.

The U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories fell more-than-expected in the week ended June 24, declining by 4.4 million barrels, nearly tripling expectations for a 1.5 million barrel decline. 

Crude supplies fell by 1.7 million barrels in the preceding week.

Total U.S. crude oil inventories stood at 359.5 million barrels as of last week, remaining above the upper limit of the average range for this time of year.

Total motor gasoline inventories unexpectedly declined by 1.4 million barrels, confounding expectations for a 0.8 million barrel increase.

U.S. crude oil imports averaged just under 8.9 million barrels per day last week, down by 271,000 barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged 8.8 million barrels per day, 891,000 barrels per day below the same four-week period last year.

U.S. crude oil refinery inputs averaged about 15.2 million barrels per day, 31,000 barrels per day below the previous week’s average. Refineries operated at 88.1% of their operable capacity last week.

Gasoline production decreased last week, averaging nearly 9.1 million barrels per day. Distillate fuel production increased last week, averaging about 4.4 million barrels per day.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for August delivery surged 2.2% to trade at USD110.89 a barrel, up USD16.36 on its U.S. counterpart.

Thu, 06/30/2011 - 09:26 | 1415152 FrankIvy
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dcb wrote:  "It makes me insane that the answer is not to blame monetary policy for the price spike, and to release oil from reserves to counter the monetary policy."

Challenge your assumption.  It is not monetary policy driving the oil markets.  Sure, there is some impact on oil price from money pumping and fiat chasing non-paper investment.

But don't discount that oil supplies are tight and getting tighter.

If they know that oil supplies are going to be sharply lower over the next 12 months, then this move becomes obvious - they are preemptively attempting to prevent a rapid spike in price and gross civil discontent in the U.S..  Maybe they believe they can buy time to get through driving season - but the piper will be paid.

Thu, 06/30/2011 - 10:04 | 1415292 Citxmech
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This is going to be written in the same book as Gordon Brown's decision to sell Britain's gold.

On a scale of "Harbinger's of Doom," I give this one 2-1/2 horsemen.

Thu, 06/30/2011 - 10:39 | 1415446 gorillaonyourback
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Thu, 06/30/2011 - 10:00 | 1415293 Bokkenrijder
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Could the US be selling (expensive?) oil because they foresee a major downturn in crude?


What about the (proven) link between recessions and the price of oil?

Thu, 06/30/2011 - 10:40 | 1415451 gorillaonyourback
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does your hypothesis make any sense to your own gut feeling?

Thu, 06/30/2011 - 09:02 | 1415046 FrankIvy
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Thu, 06/30/2011 - 09:46 | 1415201 Tremain
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FrankIvy I think you are spot on, spare capacity is now zero. Production decline rates are far higher than we are being told. This smacks of desperation and then some. If it were merely a matter of price then why not wait till oil tested the old highs around $140 a barrel? You can massage statistics and outright lie all you want, but you can’t print oil. I don’t think we’ll have to wait till 2012 before things get ....interesting.

Thu, 06/30/2011 - 09:04 | 1415058 buzzsaw99
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this is funny as hell

Thu, 06/30/2011 - 09:04 | 1415059 Fanatic
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QE3 IEA style.

Thu, 06/30/2011 - 09:04 | 1415062 AccreditedEYE
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You don't fight controllers of massive proven reserves that supply to the world with arguably 40 days worth of supply.... Who the hell is running this show? Is this amateur hour? Can't wait for the return of the gas lines from the 70's. Hopefully, these idiots won't piss Canada off too.

Thu, 06/30/2011 - 09:24 | 1415144 DonnieD
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Pissing off Saudi Arabia is irrelevant. If the US finds a huge reserve should we not tap it because we'd lower the price of oil and piss off the Saudi's? They'll sell all their oil either way, whether to us or China. 

The real issue is the corruption and incompetence of the IEA and the Obama Administration. There is nothing "strategic" about the summer driving season. It's a patheitic political ploy by an incompetent leader who is seeing his chances for reelection go down the drain as the economy falls flat on it's face.

Should have never returned that call to Krugman, Obama.

Thu, 06/30/2011 - 09:38 | 1415185 AccreditedEYE
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I'm not just talking about Saudi Arabia... I mean OPEC. And while, yes, they will sell their oil anyway, they don't need a whole lot of inspiration to put some pressure on their biggest customer and thus jack up profits.

In regards to the reserve tap, while I agree, it still takes a lot of time. Even the most incompetent political advisors should have been able to point this out as a mistake. As much as they are trying to not repeat the Carter years, their efforts are failing.  

Thu, 06/30/2011 - 09:48 | 1415213 Tremain
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60 million barrels is less than one days supply of oil.

Thu, 06/30/2011 - 09:50 | 1415241 AccreditedEYE
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Go do some homework on the SPR...

Thu, 06/30/2011 - 09:08 | 1415065 BeerWhisperer
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Holy Smokes!


U.S. caught China buying more debt than disclosed

Thu, 06/30/2011 - 09:05 | 1415066 Cassandra Syndrome
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Ha ha, they are losing the plot. Mad General Bunker syndrome. I'm sure Cognitive Dissonance can give a fancier appropriate title than that for us.

Thu, 06/30/2011 - 09:12 | 1415082 Oh regional Indian
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Ultimately, a magazine has only limited rounds.

Shooting blanks by october? All these ridiculous decisions scream of somethign someone knows that most of us do not. Insane. 

Add to the ME powederkeg, irritate Iran....


Thu, 06/30/2011 - 09:18 | 1415100 Confused
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scream of somethign someone knows that most of us do not.


There must be something cooking. Price at the pump can not be the only reason. It just doesn't make sense.

Thu, 06/30/2011 - 09:32 | 1415159 FrankIvy
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Confused wrote: There must be something cooking. Price at the pump can not be the only reason. It just doesn't make sense.

Maybe, maybe not.  It may just be trying to get out in front of the wave.  Or reverse wave.

Thu, 06/30/2011 - 09:55 | 1415244 Oh regional Indian
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Which wave frank? They make the waves, they do nto need to second or third guess anything or anyone.


Thu, 06/30/2011 - 10:19 | 1415364 FrankIvy
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E.g. - if they know a supply constraint is coming, they may be trying to get the price down in front of that constraint, because a move like this might be thought to have less impact in an obvious bull run than at this moment.

Thu, 06/30/2011 - 11:07 | 1415548 pazmaker
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ORI, Correct me if I'm wrong, but I recall you predicting something major/catastrophic would happen this week.  3 more days?

Thu, 06/30/2011 - 09:13 | 1415083 malikai
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 "Richard Jones, deputy executive director of the IEA, said he believed the release would be temporary since demand would likely drop in the fourth quarter."

Of course the releases will be temporary. Once the SPR oil is gone, there will be no more releases!

You all need to calm down, these guys are pros. They have it under control.

Thu, 06/30/2011 - 09:18 | 1415115 mayhem_korner
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Any release is a discrete event...doesn't have a duration.  There's only whether and how much.

Thu, 06/30/2011 - 09:23 | 1415117 SheepDog-One
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The oil release is for invasion of Iran which is within a couple weeks. Remember this post.

Thu, 06/30/2011 - 09:23 | 1415135 mayhem_korner
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Ain't gonna happen.

Thu, 06/30/2011 - 09:31 | 1415156 SheepDog-One
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What 'aint gunna happen', invasion of Iran? Its all over middle east news, read DebkaFile.

Thu, 06/30/2011 - 09:45 | 1415199 centerline
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WMDs.  Got to go get them WMDs.  The MSM has been warming that one up for while.

Thu, 06/30/2011 - 14:35 | 1416343 DaveyJones
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Words of Mass Deception?

Thu, 06/30/2011 - 09:55 | 1415245 Silver Dreamer
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I laughed when I saw the neo con DrudgeReport title yesterday of "Iran tests nuclear missile."  LOL  The drum beat for war is loud.  Nuclear missile?  Give me an effing break.  The title is a complete lie, but the sheeple sucked it right up I'm sure... 

Thu, 06/30/2011 - 09:53 | 1415256 centerline
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I saw that and thought the same thing.

Thu, 06/30/2011 - 09:56 | 1415251 malikai
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I'll bet you $1 that there will be no invasion of Iran.

Thu, 06/30/2011 - 09:59 | 1415268 centerline
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Maybe.  But who knows.  The whole ME thing has been set up as a perpetual war.  Very Orwellian.  I think it is a distraction.  It is about oil (of course).  And I think it is the ultimately "Plan B" -  the panic button that can be pushed if other plans do not succeed.

Thu, 06/30/2011 - 09:30 | 1415153 Hubbs
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Instead of follow the money, follow the oil? Going to military refuelers, storage facilities?

Thu, 06/30/2011 - 09:09 | 1415085 libertus
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IEA is selling the oil to China and they are paying for it by buying Euro debt. 


Thu, 06/30/2011 - 10:44 | 1415478 gorillaonyourback
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ooohh,  evades the light of day.  good thought

Thu, 06/30/2011 - 09:11 | 1415089 the not so migh...
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China doesn't want anymore funny money.

Thu, 06/30/2011 - 09:21 | 1415112 SheepDog-One
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Thats right, we're now fire-selling the last of our assets, China doesnt want any more funny money.

We've already sold off all our jobs and manufacturing, our once huge grain reserves are now nothing, now all our oil is sold off. If people cant see whats really going on, that will be their own very uncomfortable problem real soon.

Thu, 06/30/2011 - 09:20 | 1415105 John McCloy
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Like the Fed they are only left with rhetoric to engage reality. This is a trial balloon meant to get price lower before 4th of July but it won't work. What scares them the most is that they are one ME event, uprising or Iran lowering production from having 125 oil.
People need to be addressing the real issues which is the money printing and these guys are talking about Ringling Brothers solutions.

Thu, 06/30/2011 - 09:23 | 1415116 Caviar Emptor
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Money printing yes, but alone won't do it: need to address oil consumption

Thu, 06/30/2011 - 09:28 | 1415142 SheepDog-One
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Invasion of Iran is already set and its very soon, thats what the SPR tap is all about, DebkaFile is all over it.

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