28 March 2012 16:54 [Source: ICIS news]
LONDON (ICIS)--Crude oil futures extended losses on Wednesday after France joined the UK and US in agreeing to a possible release of oil from strategic reserves.
By 14:00 GMT, the front-month May NYMEX contract fell to an intra-day low of $105.06/bbl (€78.80/bbl), a loss of $2.27/bbl against Tuesday’s settlement. It then edged higher to trade around $105.35/bbl.
At the same time, the May ICE Brent contract was trading around $124.00/bbl, having touched an intra-day low at $123.63/bbl, down by $1.91 compared with Tuesday’s close.
France is the latest country to join the UK, US, South Korea and Japan in agreeing to a possible release of oil from strategic reserves to exert downward pressure on oil prices.
The International Energy Agency (IEA), which normally co-ordinates strategic oil releases, has not yet concluded whether the current supply disruptions warrant a release of oil from strategic reserves.
Saudi Arabia has raised its oil production to over 10m bbl/day to counter the reduction of Iranian crude exports. Saudi Arabia signalled its ability to raise production to 12.50m bbl/day if necessary.
The oil producing nation has also moved crude stockpiles to other regions in case tension between the West and Iran leads to a blockade of the Strait of Hormuz shipping lane.
The IEA released 60m barrels of oil from reserves in 2011 in response to the civil war in Libya.
$1 = €0.75
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