labels: industry - general, oil & gas, economy - general
Oil prices dip as international community pledges release of reserve stocksnews
03 September 2005

New York: Oil prices experienced a sharp drop yesterday as the international community agreed to release stocks from reserves to help avert a fuel crisis threatening the US.

The promise of fresh supplies from International Energy Agency (IEA) countries, hit prices hard with US crude falling by around US$2 a barrel to $67.30, well down on the record high of $71.85 earlier in the week.

The pressure was also eased by the reopening of some of the pipelines and ports along the Louisiana coastline. Royal Dutch Shell said repairs were under way at its 225,000-barrel refinery, and the plant might reopen next week.

Petrol pumps have been running dry and prices soaring after Hurricane Katrina pummelled the Gulf of Mexico, the most important oil and gas-producing region in the US.

The Paris-based International Energy Agency, which coordinates emergency responses to energy crises among its 26 member states, said last night they had agreed to release 2m barrels a day of crude from reserves for an initial 30 days. That is roughly equivalent to the output lost in the Gulf of Mexico as oil platforms have been forced to close. The agency has only once before organised a release of oil, during the first Gulf war in 1991.President George Bush said on Thursday that the US would release oil from its own strategic reserves.

Economists fear that the rising price of oil could have a devastating impact on the American - and consequently the world - economy. It will take around 10 days for the fuel to reach the US from Europe.




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Oil prices dip as international community pledges release of reserve stocks