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Oil prices drop on IEA decision

Friday, June 24, 2011 - 01:27

June 23 - Oil prices head sharply lower as IEA taps strategic reserves. Traders don't expect oil prices to head higher anytime soon, giving drivers a break at the pumps. Jill Bennett reports.

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PLEASE NOTE: THIS EDIT CONTAINS 4:3 MATERIAL Crude oil prices plunge Thursday on news the International Energy Agency said it would release 60 million barrels a day over an initial 30 days to ease the shortfall from Libya and push down fuel prices. The surprise announcement to add reserves from strategic government stockpiles is a bid to prop up the worldwide economy. Cindy Wexler, Independent Trader at the NYMEX: SOUNDBITE: CINDY WEXLER, INDEPENDENT TRADER, NYMEX (ENGLISH) SAYING: "This is going to have a real impact, a real impact and a psychological impact on the markets because it's showing the governments commitment to addressing high energy costs." The United States will provide half the volumes from its crude reserve, with Europe supplying 30% and the rest from Pacific nations. The release is only the third in IEA's 37-year history. And it follows OPEC's decision to cap output at a meeting earlier this month. It will mean drivers will get a break during the busy summer driving season. Anthony Grisanti, President of GRZ Energy: SOUNDBITE: ANTHONY GRISANTI, PRESIDENT, GRZ ENERGY (ENGLISH) SAYING: "You've definitely seen the high for gas prices for the summer I expect them to go even lower from where they are, probably another 10-20 cents at the pump" Other factors affecting the price: forecasts for lower U.S. growth and evidence of a manufacturing slowdown in China. The IEA plans to review the need for a further release in a month. Jill Bennett, Reuters

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Oil prices drop on IEA decision

Friday, June 24, 2011 - 01:27