Oil influx
June 24, 2011
Industrialized nations including Germany banded together Thursday to release portions of their emergency oil reserves for just the third time ever, following disturbances to global supply in the wake of the Libyan conflict.
The International Energy Agency (IEA) said it would inject 60 million barrels of government-held supplies into the global market, increasing world supply by some 2.5 percent for the next month.
Oil prices tumbled more than 6 percent on the back of the news - the lowest value since February, before civil war halted Libya's supplies. French Economics Minister Eric Besson said the price drop should be passed immediately on to consumers at the petrol pumps.
The IEA added that the action would get oil quickly to market. The body said it would decide on further releases in a month's time.
Meanwhile, Saudi Arabia, the world's biggest oil exporter, was still trying to make good on its pledge to increase output.
A total of 28 countries took part in the coordinated action aimed at making up for the drop in oil supply.
Germany joins in
For Germany, it was the first time the country has tapped into its emergency reserves since 2005, when oil prices surged on the back of Hurricane Katrina which devastated parts of southern United States.
The German Economics Ministry said the country was releasing 4.2 million barrels of oil onto the market, or some 570,000 tons.
The broader effort threatens to inject new uncertainty into oil markets as governments look more likely to intervene in fluctuating oil conditions.
Author: Darren Mara (Reuters, dpa)
Editor: David Levitz