Futures dropped as much as 1.5 percent before reports this week that may show U.S. consumer spending climbed at the slowest pace in almost a year and manufacturing cooled. The IEA, adviser to 28 nations, will act again if needed, Executive Director Nobuo Tanaka said in Beijing on June 25. Greek lawmakers will vote on a five-year austerity plan that must pass for the cash- strapped nation to secure more international aid.
Leading into the IEA’s decision to release stockpiles, we had a global economy that is slowing and we already had concerns over Greece, the IEA’s move suggests there is more urgency for lower oil prices than the market though.
Crude for August delivery fell as much as $1.34 to $89.82 a barrel on the New York Mercantile Exchange, and was at $90.34 at 8:43 a.m. Singapore time. Prices rose 14 cents, or 0.2 percent, to $91.16 on June 24, and are up 15 percent in the past year.
Brent oil for August delivery fell as much as $2.84, or 2.7 percent, to $102.28 a barrel on the ICE Futures Europe exchange in London. The contract dropped $2.14, or 2 percent, to $105.12 a barrel on June 24, the lowest close since Feb. 18.
Brent, the European benchmark contract, traded at a premium of $12.75 a barrel to U.S. West Texas Intermediate futures.
The Federal Reserve is unlikely to start a third round of quantitative easing, known as QE3, when a $600 billion purchase program ends this week.
The world’s biggest crude user may release oil stockpiles to drive prices lower and stimulate consumption.
Instead of QE3, we have IEA1, which is the release of strategic oil reserves, the IEA’s decision is really pushing oil prices down.
Consuming nations will release emergency oil stockpiles through the IEA for the third time in more than three decades as the war in Libya chokes global supplies, the Paris-based agency said on June 23.
The U.S. Strategic Petroleum Reserve will provide 30 million barrels of the IEA release, European members will supply about 20 million and Asian nations about 10 million barrels.
It’s helping Greece, it’s helping Europe, it’s helping everyone by lowering the cost of oil imports. Except in the case of Portugal, were they continue to have one of the most expensive final consumer prices for the motorist at the filing station, at the moment BP has the most expensive price per liter 1,601 for regular 95 Octane.
This attitude by the petrol companies Galp, BP, Repsol and Cepsa will affect Portugals austerity plan, as consumer demand will continue to drop as well as Tax revenue derived from petrol produtcs.
It seems like there’s a policy shift by the U.S. and some European Nations to try and get external markets to help lower crude prices, except in Portugal were consumer prices are inflated to record cost.