The Oil Drum

Thanks to Amy for the news that the IEA loan is now over.  This with the need to also repay some of the loans, though not the purchases, from the SPR will no doubt add some pressure to any demand drop in the second quarter.

The members "agreed that the impact of hurricanes Katrina and Rita has been successfully addressed by a combination of the IEA collective action, lower than expected demand, worldwide refinery flexibility and additional efforts by producer countries.

__"The IEA member countries will exercise flexibility in re-establishing their emergency stock levels through 2006, noting the need to take into account seasonal demand and the possibility of higher than expected refinery maintenance," (IEA Chief Claude) Mandil said on Monday.

One of the activities that has, in the past, mopped up a certain amount of surplus supply was the steady purchase of oil for the Strategic Petroleum Reserve. About a year ago we were looking to the Chinese to put a significant effort this year into building their own reserve.  Several posts have discussed, either in the lead or comments, the investment that has been made in the required infrastructure. And there is a concern that this will act as another drain on a tight supply.