U.S. says may seek emergency gasoline supplies

By Tom Doggett

WASHINGTON (Reuters) - The Bush administration was considering asking the International Energy Agency to release emergency gasoline and diesel fuel to the United States after hurricanes pushed gasoline stocks to their lowest level on record, a cabinet official said on Wednesday.

The back-to-back punches of Hurricanes Gustav and Ike were the biggest hit to U.S. petroleum supplies since storms Katrina and Rita shut refineries and destroyed offshore rigs three years ago.

U.S. Energy Secretary Sam Bodman told reporters the Bush administration was reviewing whether to seek help from the International Energy Agency for the latest blow to the U.S. oil sector.

"It would be to provide refined products," Bodman said following a speech to the National Petroleum Council.

"The real need on a macro basis, from the country's standpoint, is the availability of refined product ... gasoline and diesel, but largely gasoline," he said.

While Bodman said a decision could have come as early as Wednesday, an Energy Department spokeswoman said later that the IEA was still getting information on the U.S. supply situation and energy infrastructure damage and there was "no imminent decision at this time" on whether to ask the IEA for help.

The IEA was created in the mid-1970s following the Arab oil embargo to coordinate energy policy and the release of emergency petroleum stocks among industrial nations.

The U.S. Energy Information Administration reported Wednesday that U.S. weekly gasoline inventories were at their lowest level since the agency started keeping such records in 1990, falling 3.3 million barrels to 184.6 million barrels.

The 12 oil refineries still shut along the U.S. Gulf Coast due to the hurricanes represent about 1.1 million barrels a day in lost gasoline production and more than 700,000 bpd in distillate fuel output, according to the EIA.

With U.S. gasoline prices rising after hurricane Ike, European refiners have an incentive to ship emergency supplies to the American market, because they could make bigger profits from falling crude oil input costs, EIA analyst Doug MacIntyre said.

"If the pricing is high enough here versus there, the arbitrage would encourage" European gasoline exports, he said.

While oil prices settled $6 higher in Wednesday futures trading, they were still below $100 a barrel.

It would take seven to 10 days for emergency fuel supplies from IEA members in Europe to reach the United States. While many of the shut refineries would likely be back to normal by the time the supplies arrived, the gasoline and diesel would still be needed to replace depleted American fuel stocks.

"There's the drawdown of inventories we've been seeing that would need to be back-filled," MacIntyre said.

Bodman said the oil refineries that were shut were in "reasonably good shape" after the hurricanes, but they can not operate because they do not have electricity.