Japan Extends Oil Reserve Release to U.S.

TOKYO – Japan has extended plans to release some of its emergency oil reserves held by refiners to alleviate market shocks after Hurricane Katrina struck U.S. oil refineries, a Trade Ministry spokesman said Friday.

Japan said last month it would release about 7.3 million barrels of crude oil and refined products over the course of 30 days – the third time Japan has tapped emergency reserves, following the 1979 oil crisis and the Gulf War in 1991.

Some of the oil has already been shipped to the United States.

The government decided to extend the period for another 30 days starting Friday, Trade Ministry official Keiichi Hakozaki said.

Trade Minister Shoichi Nakagawa said the release means Japan will have an emergency stockpile equivalent to 67 days of imports over the coming 30-day period. Japan normally keeps a 70-day minimum, Hakozaki said.

“Sometime in the future we need to lift the stock level back up to the normal level, but replenishing stockpiles may have an impact on global crude oil prices,” Nakagawa said at a news conference.

The release of oil reserves by several countries was coordinated through the International Energy Agency.

It announced last month that its 26 members, including Japan, would draw on 2 million barrels a day of oil to help offset the loss of output and refining capacity in the U.S. caused by Hurricane Katrina, and restore confidence in the market.

Crude oil prices made gains Friday after a five-day decline, suggesting that traders shrugged off signs of faltering U.S. fuel consumption and expected demand to rise as winter kicks in.

Light, sweet crude for November delivery on the New York Mercantile Exchange rose 37 cents to $61.73 a barrel in Asian electronic trading midmorning in Singapore. The contract on Thursday lost $1.43 to finish at $61.36 a barrel, the lowest settlement since Aug. 3.

Crude is more than 13 percent off its recent high of $70.85, reached briefly on Aug. 30 after Hurricane Katrina struck the Gulf coast. That level is still about $20 below the all-time highs reached in the early 1980s, when adjusting for inflation.