* IEA, Japan, South Korea question need to release reserves
* North Sea supply shortfall may ease after maintenance ends
* Winter demand, low product inventories to support prices
By Ramya Venugopal
SINGAPORE, Aug 20 (Reuters) – Brent crude futures inched up in early Asian trade on Monday after a plan by the United States to release its strategic petroleum reserves met opposition, while expectations of a revival in North Sea crude output also limited gains.
Oil prices slipped last week after a source said the White House was “dusting off” plans for potentially tapping the Strategic Petroleum Reserve, as high energy costs from undermining the success of Iran sanctions.
Japan and South Korea as well as the head of the International Energy Agency (IEA), the energy watchdog of the West, said on Friday there was no reason to release U.S. reserves to arrest the rise in gasoline prices.
Brent crude for October rose 52 cents to $114.23 a barrel by 0252 GMT. U.S. oil added 24 cents to $96.25.
Brent has risen more than a third in less than two months from the year’s low of $88.49 on supply concerns after a dispute between Iran and the West over its nuclear programme.
“The market may have reason to believe that it was scare-mongering, especially if the IEA is suggesting it won’t be supportive of the release of reserves,” said Natalie Robertson, an analyst at ANZ in Sydney.
“Brent has been supported by the ongoing disruption in North Sea supplies, but they are expected to ease in the coming months, which could dampen prices.”
TO RELEASE OR NOT TO RELEASE
U.S. officials are collecting information about potential needs and studying futures, production numbers and data on Iranian oil exports, the source said on Thursday.
A day later, Maria van der Hoeven, executive director of the IEA, said there is no reason for a release, adding that the market was sufficiently supplied.
She said she had not discussed a potential release with members of the Paris-based IEA, which is charged with coordinating use of consumer nations’ strategic inventories.
Britain and France appeared open to discussing the possibility, but officials in Japan and South Korea said on Friday they saw no cause for action, adding stock releases are usually considered during supply shortages not because of price gains.
Brent crude has also been supported in recent weeks by expectations of shrinking North Sea production, which will fall about 17 percent in September from August, as the key Buzzard field will be offline for maintenance.
Buzzard is the UK’s largest oilfield and is suspending output until about mid-October. Buzzard is the single biggest contributor to the Forties stream, which in turn is the largest of four crude flows that set the price for Brent.
Still, this shortfall is viewed as a temporary glitch, with traders expecting the pressure to ease in coming months when the maintenance is completed.
Traders are also looking to the minutes of the last Federal Open Market Committee’s (FOMC) July 31-Aug 1 meeting on Wednesday, which may provide cues on the U.S. Federal Reserve’s view on further policy easing. (Editing by Ed Davies)
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