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IEA says strike-hit France uses emergency oil

Published 10/13/2010, 06:24 AM
Updated 10/13/2010, 06:28 AM
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* Strike action may result in a drawdown of European stocks

LONDON, Oct 13 (Reuters) - France has tapped emergency oil stocks, the International Energy Agency (IEA) said on Wednesday, as the country copes with a near halt in oil refining due to strikes at refineries and its top oil port.

But the agency said France has maintained its minimum emergency stock levels by using what it called "a geographical exchange" of reserves in the needed area for commercial stocks elsewhere in France by designating them as emergency stocks.

The Paris-based IEA advises 28 oil-consuming countries, which are obliged to hold certain oil stocks. The stocks can be released under the agency's coordination in case of emergency on top of commercial stocks held by oil companies.

If strikes at oil refineries and top French oil port Fos-Lavera, now into its 17th day, continue to block crude oil supplies, the result still may be a sharp drawdown in oil stocks in Europe, the agency said.

"The potential loss of around 800,000 barrels per day of refinery capacity due to the port strikes, if sustained, and the added shutdowns elsewhere in the country due to the separate action from 12 October, have at first glance the potential to push European commercial products stocks sharply below September's 38.5 days," the IEA said.

The agency pointed out oil refineries in other countries could fill the supply gap by using surplus refining capacity but that logistics of crude and oil product supplies in France would remain problematic.

(Reporting by Ikuko Kurahone, editing by Jane Baird)

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