Most of the oil consuming countries including the US released their emergency oil stocks to hold further oil price rise. Resultantly, oil prices rose by a dollar in London. The action was seen as a major success, as remarked most oil experts. The US witnesses a peak in driving this time of the year and this release of stocks has averted a price rise, while keeping the oil speculators in a strict check.
The IEA release has overhauled the psychology that existed in the oil market until recently, as remarked by an expert. This has also put speculators into a series of thoughts, making them worry about the fact that if oil prices try to break above certain level, extra oil can come into market, by the consumer countries using the strategic reserves of oil.
The IEA’s extra supply of oil has brought about a 22% slide in the prices of oil in US. US Crude oil traded at about $90 on September 15, 2011. Though the program of releasing 60 million barrels, by the IEA comprising 28 nations, came up in June this year, it has formally come to an end on September 15, 2011. In its young stage it lead to an immediate drop in $7 per barrel in Brent Crude. In April, this year Brent crude was at its highest at $127 a barrel; however it did not touch this level once the release decision rolled out.
The release by the IEA nation was a reaction to the prices of oil surging ahead steadily and also to cater to the supply in war torn areas of Libya. This was a marked departure from the Bush policy of using strategic reserves only for a war situation or a major natural hurricane.
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