HOUSTON (Reuters) - Top executives from some of the world’s biggest energy companies on Tuesday said global oil supply is plentiful in spite of Libyan supply disruptions, and urged U.S. policymakers not to tap strategic oil stockpiles.
At the high-profile CERAWeek energy conference sponsored by IHS CERA, chief executives from French oil major Total SA, U.S.-based Hess Corp and Kuwait Petroleum Corp warned against a knee-jerk reaction to fighting in Libya, which has idled two-thirds of the African OPEC member country’s oil output.
Fellow OPEC producers like Saudi Arabia “have the capacity to fill the gap, so sending the message that we need to use the strategic reserves in my opinion will ... deliver the message that we are scared,” said Total Chief Executive Christophe de Margerie.
Oil executives echoed assurances from OPEC officials that current supplies were sufficient to fill Libyan shortfalls.
“There is an exchange of views between different members of OPEC,” Algeria’s Oil and Energy Minister Youcef Yousfi told Reuters on the sidelines of the conference. “We do not think there is a physical deficit of oil in the market.
“Any shortfall can be mitigated in the short run,” said Farouk Al-Zanki, chief executive of state-owned Kuwait Petroleum Corp.
The Obama administration is weighing requests by U.S. lawmakers to tap the 727 million barrel Strategic Petroleum Reserve, or SPR, in a bid to tame U.S. crude oil futures that hit their highest level in 2-1/2 years this week.
The U.S. Strategic Petroleum Reserve, “should be left for the time when you are really confronted with a shortage of oil, which is not the case,” Total’s de Margerie said.
White House economist Austan Goolsbee said on Tuesday that tapping the U.S. emergency oil stockpile oil was one option the Obama administration has to respond to supply disruptions that sent world oil prices soaring.
“There is plenty of capacity in the world today ... to meet the shortfall from Libya,” said John Hess, CEO of Hess Corp, pointing to increased shipments from other Middle East suppliers. “That will stabilize prices from getting out of hand,” Hess said.
Saudi Arabia, the world’s largest oil exporter and home to most of OPEC’s spare capacity, has boosted oil production to fill the gap left by Libyan exports and is now pumping about 9 million bpd, almost 1 million bpd above its OPEC quota.
Additional reporting by Edward McAllister and Kristen Hays in Houston; Writing by Chris Baltimore, Editing by Marguerita Choy