‘IEA may release more oil stockpiles’

[jpak]

http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=443226&version=1&template_id=48&parent_id=28

The International Energy Agency is monitoring energy markets after its members’ decision to release oil stockpiles and will act again if needed to stabilise prices, Nobuo Tanaka, the agency’s executive director, said in Beijing.

“We are waiting for market reaction and assess the situation and decide further action after 30 days,” Tanaka told reporters at a conference in the Chinese capital yesterday. “If necessary we’ll continue.”

The US and 27 allies 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 Thursday.

The release of 60mn barrels, or 2mn bpd of oil over 30 days from the end of next week, will be coordinated by the IEA, it said. The move comes 15 days after the Organisation of Petroleum Exporting Countries failed to reach an accord on production increases at a meeting in Vienna.

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My heart bleeds for those poor oil speculators

:cry:

[bbinacan]

1. The US released 30 million,

that'll last us about a day and a half.:eyes:

[Yo_Mama]

2. For a real supply issue

this would accomplish nothing. You are unquestionably right about that.

But it can drive purely speculative price increases (those not founded on supply issues) right out of the market, which is what they are trying to do. This is a new and different use of the strategic reserves, but since the Fed Chief keeps insisting that it is a supply issue, I guess they are justified.

Speculators make their profits on the last 1% available, and speculation is based not on supply and demand but on perception, so while these moves can only change perception, they will be effective at greatly reducing speculation-induced price increases.

[bbinacan]

3. Possibly,

it depends on the strike price and expiration of the contracts they bought. You have two sides in the commodities markets, well hell any market, some are trying to lock in a set price for future delivery.

[Yo_Mama]

4. Yes

That's what I was trying to get at by "pure speculation".

Most of the commodities trading is normally from business necessity, and that will not change from the releases. But pure speculators only seeking to run a profit will be dissuaded somewhat.