Friday, 24 June 2011 10:55

Release of Reserves Gets Prices Lower

The crude oil prices had a really bad time during the last month, from the view of the buyers. Almost $114 cost per barrel in April. The last time the prices were as high as they were in 2008. Then came another raising after the OPEC meeting. The dollar was still low and the economy not just catching up in the United States, but also in Europe there are no sunny days. But at the start of the second half of this year the IEA proposed a solution for this problem.

The International Energy Agency decided to release a part of their emergency stocks for the next 30 days. With this move they want to lower the prices and to restore the balance of offer and demand in the oil trade. Within this plan, Asia will release around 12 million barrels,  from which Japan will release as much as its 3-days-consume. South Korea will expose 3,47 million barrels. Europe clubs with 18 millions. The United States, where the emergency reserves are as full as never before with 727 million barrels, will release 30 millions. However, the US usually imports 11 millions barrels per day and wastes 19 millions.

Actually, at the start of this plan, the reaction was positive. The prices dropped, a barrel Brent costs $107.95, WTI $91.93.

Share on Myspace