March 28 (Bloomberg) -- The U.S. government has proposed releasing fuel from strategic stockpiles to curb rising oil prices, French Industry Minister Eric Besson said.
The French government “welcomed the proposal,” Besson told reporters today in Paris after a weekly cabinet meeting.
France is waiting for a report from the International Energy Agency on inventories before deciding on such a move, Budget Minister Valerie Pecresse said later at a press conference. “France is accompanying the U.S. and U.K. in the IEA consultation, which could allow the release of strategic oil reserves in order to break the rising price spiral,” she said.
Tapping strategic reserves is one option being considered to counter rising oil prices, Besson said last week. The Paris-based IEA coordinated the release of 60 million barrels of crude and oil products in June after Libyan output was disrupted by an armed uprising against Muammar Qaddafi. The agency also made supplies available during the 1991 Persian Gulf War and when Hurricane Katrina damaged oil rigs and refineries in the Gulf of Mexico in 2005.
An IEA official, asking not to be identified citing the agency’s policy, declined to comment today on what the French ministers said.
Oil declined for the first time in four days in New York amid signs of increasing supply in the U.S., the world’s biggest crude-consuming nation. The release of oil from the Strategic Petroleum Reserve “has been in consideration for some time,” Charles McConnell, U.S. acting assistant secretary for fossil energy, said at a hearing in Washington yesterday. No decision has been made, he said.
Futures slipped as much as 1 percent to $106.22 a barrel before a government report that analysts forecast will show crude inventories rose to a six-month high last week. Supplies jumped 3.6 million barrels, the American Petroleum Institute said yesterday.
The IEA isn’t planning a coordinated release of emergency oil stockpiles among its 28 member nations, Executive Director Maria van der Hoeven said March 22 in an e-mailed statement during an official visit to New Delhi. The agency advises oil-consumer nations including the U.S., the U.K., Japan and Germany on energy policy.
“Individual IEA member countries may use their stockpiles as they see fit, provided they don’t fall below 90 days of net imports,” she said in the statement. “This would normally be undertaken after consultation with the IEA and others, and since we have not yet discussed specific plans with any country, it is premature to speculate on unconfirmed rumors about individual stock releases.”
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