The Guardian (UK): New supplies cut oil price: “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.”: Saturday September 3, 2005
David Teather in New York
Oil prices fell sharply yesterday as the international community agreed to release stocks from reserves to help avert a fuel crisis threatening the US.
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. He also urged Americans to conserve fuel. But with a holiday weekend approaching, there were long queues of people yesterday waiting to fill up at roughly $3 (about £1.60) a gallon. According to some reports, up to 15% of petrol stations have run dry.
The promise of fresh supplies from IEA countries, many of which are in Europe, hit prices hard. US crude fell by around $2 a barrel to $67.30, well down on the record high of $71.85 earlier in the week. Prices have doubled in the past year, driven by strong demand in the US and China at a time when supplies are stretched.
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.
Economists fear that the rising price of oil could have a devastating impact on the American - and consequently the world - economy.
The German chancellor, Gerhard Schröder, said the IEA move should ease the situation. "We assume that would lead to there being sufficient energy reserves in the market."
It will take around 10 days for the fuel to reach the US from Europe.
Ben Bernanke, the White House chief economic adviser, said prices at the pump were unlikely to go down for at least "the next six to eight weeks".
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