Oil prices steady after plunge

24th June 2011, Comments 0 comments

World oil prices steadied on Friday after plunging one day earlier when the International Energy Agency decided to tap emergency crude reserves to make up for 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 percent, on Thursday.

In early London trading on Friday, Brent North Sea crude for August fell 43 cents to $106.83. It plunged $6.95, or 6.0 percent on Thursday.

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

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 Fatih Birol on Tuesday said there was a "strong potential" that persistently high oil prices could derail the global economic recovery.

Birol said the average price 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.


© 2011 AFP

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