SPR Release Could Cover Venezuela Oil Shortage
By Campion Walsh
WASHINGTON (Dow Jones) - Release of crude oil from the U.S. government's stockpile would be one of several ways to make up for a shortage of oil on world markets resulting from industry-paralyzing strikes in Venezuela, the head of the government's top energy market forecaster said Thursday.
Asked if release of oil from the Strategic Petroleum Reserve is the best way to compensate for Venezuelan oil exports lost since strikes began there in early December, Guy Caruso, head of the Energy Information Administration, said, "it's one of them, but there are... others."
Among other potential solutions would be relatively short-haul supplies from Western Europe, North Africa or West Africa, which might be freed up if the Organization of Petroleum Exporting Countries decides to increase supply, Caruso said.
OPEC plans to meet Jan. 12 in Vienna and industry observers expect the group to raise supply by 1 to 1.5 million barrels a day. While crude supplies from Persian Gulf countries with the most extra production capacity can take up to 45 days to reach the U.S., the shipment time to other markets such as Europe is shorter and could free supplies there for export to the U.S.
Caruso said, "it's too close of a call right now," as to whether it might be better to have a blanket release from the SPR or one targeted at refiners whose operations have been most affected by the Venezuela export reduction.
The EIA administrator emphasized that his agency collects statistics and makes forecasts but doesn't make policy decisions such as whether to release SPR crude.
He was addressing reporters' questions at the release of the EIA's Annual Energy Outlook.
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