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Bearish EIA Data Can’t Keep Oil From Rallying

Bearish EIA Data Can’t Keep Oil From Rallying

A somewhat bearish EIA inventory…

IEA Gets New Leader Everyone Can Agree On

The International Energy Agency (IEA), which advises 29 industrialized countries on energy policy, has for the first time chosen one of its own to be its next executive director, a choice approved by virtually all observers inside and outside the agency.

For one thing, Fatih Birol, a Turkish citizen now serving as the IEA’s chief economist, was “the first executive director in the history of the IEA who had been elected with the support of all member states,” according to a statement from Turkey's Foreign Ministry.

Birol, 56, also is “[a]n outstanding choice, given his experience, knowledge, and the fact that he is very personable,” Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Mass., said in an e-mail to Bloomberg. He said Birol has “a very cordial relation with his counterparts in OPEC.”

Related: Oil Price Crash – What Next?

Lynch added that being a technocrat shouldn't hamper Birol's effectiveness. “The most recent directors have not been ‘superstar’ politicians such as a Hillary Clinton or Dominique Strauss, so having a technocrat shouldn’t lower its public standing,” he wrote.

After a brief stint at OPEC, Birol has served the past 20 years at the IEA, rising to the rank of chief economist nine years ago. As such he is responsible for the agency's annual report, the World Energy Outlook, which outlines the group's forecasts of the supply of and demand for energy over the coming 20 years.

The Paris-based IEA confirmed Birol's appointment on Feb. 13, a day after it was announced by the government of Turkey. He will take over for Maria van der Hoeven on Sept. 1, after her four-year term expires on Aug. 31.

Birol reportedly applied for van der Hoeven's position in late 2014 and evidently had only one serious competitor for the job, a candidate from Greece. But people familiar with the selection process told the Financial Times that this anonymous contender didn't have the support of leading members of the IEA, including Japan and the United States.

Related: Why We Won’t See An Oil Price Rebound Yet

The agency itself refused any comment on how Birol was selected. “The IEA secretariat has no information about the identities of potential candidates as this process is confidential and is directly handled by the governing board,” it said it a statement.

Birol will face a difficult job when he becomes the IEA's leader. Oil has lost half its value since June 2014, in part because of a surge in production from US shale deposits, and in part because OPEC, led by Saudi Arabia, chose at its meeting in November not to reduce its own production in an effort to shore up oil prices.

The IEA was created during the 1973-74 oil crisis to give advice on energy policy to 29 wealthy countries who are among the 34 members of the Organization for Economic Cooperation and Development. Among its responsibilities is to coordinate its member states' responses to disruptions in the supply of energy by carefully releasing emergency oil reserves.

By Andy Tully of Oilprice.com

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