Friday, March 30, 2012

Oil prices dive as IEA voices growth concerns

NEW YORK: Oil futures slid Thursday, driven lower by comments from the International Energy Agency that left the door open for countries to tap their strategic petroleum reserves to dampen prices.
New York's main futures contract, West Texas Intermediate (WTI) crude for delivery in May, slumped $2.63 to end the session at $102.78 a barrel.

In London trade, Brent North Sea crude for May settled at $122.39 a barrel, down $1.77 from Wednesday's closing level.

The IEA, which coordinates an emergency release of strategic reserves by its 28 member countries, said it was closely monitoring market developments "and we remain ready to act if market conditions so warrant."

"The oil market has been tightening in recent months; crude oil prices are very high again, and petrol (gasoline) prices have reached a record high level in some member countries," IEA executive director Maria van der Hoeven said in a statement.

"The International Energy Agency, like many others, is concerned by the impact of these high prices while the global economic recovery remains fragile."

GFT Markets analyst Fawad Razaqzada said that "sellers continue to dominate as investors consider the possibility of the release of strategic reserves by the US and other developed countries.
"This should help to dampen prices in the short-term and reduce the pressure on political leaders, already under
fire from consumers as fuel costs soar."

French government officials added to the market retreat Wednesday by signalling France was working with the United States and Britain to persuade the IEA to allow them to tap their reserves to bring down high prices.
"It's outrageous," said Phil Flynn at PFG Best.

"It's done purely for political purposes," he said, pointing to ongoing presidential campaigns in the US and France.

View the original article here
Source From Channel News Asia

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