Crude oil remains steady after sharp fall

PTI Singapore | Updated on June 24, 2011

World oil prices steadied today after plunging in the previous session when the International Energy Agency decided to tap emergency crude reserves to make up for the lost Libyan supplies.

New York’s main contract, West Texas Intermediate for delivery in August, edged up 17 cents to $91.19 a barrel after plummeting $4.39 or 4.6 per cent yesterday.

In the early London trading today, Brent North Sea crude for August fell 43 cents to $106.83. It plunged $6.95 or 6.0 per cent yesterday.

The IEA shocked the market yesterday by announcing that it had decided to release 60 million barrels of crude as part of efforts to give the global economy relief from high energy costs.

Mr Victor Shum, a Singapore-based analyst with Purvin and Gertz energy consultancy, said: “With lower oil prices, the (global) economy will have a better chance to get stronger.

Along with this, oil demand will also get a boost.”

The Paris-based IEA’s chief economist, Mr Fatih Birol, had said there was a “strong potential” that persistently high oil prices could derail the global economic recovery.

Mr Birol said the average prices of oil this year was $110, much higher than the $90 seen in 2008, the year that crude hit a record above $147 before the onset of the global recession.

That recession lasted well into 2009 and the global rebound has so far been slow especially for the United States and Europe, with Asia emerging stronger than the rest of the world.

Published on June 24, 2011

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