Drawdown news drops price oil prices

14 October 2005
With the US government indicating that it could release emergency stocks of heating oil to avoid any shortfalls in supply for the winter, spot Brent prices slipped back further in the first week of October to end at $61.94 a barrel in London, compared with $63.18 a barrel a week earlier. 'We are prepared to do what is necessary with respect to reserves,' US Energy Secretary Sam Bodman said in early October.

Another factor in the fall was the surprise statement from Riyadh that it would soon release details of a mammoth increase in its proven reserves of crude oil. The addition of 2 million barrels a day of additional crude from OPEC producers also helped ease prices.

'Past experience has taught us that very low prices and very high prices are not sustainable. Price volatility is not conducive to either stability or predictability. Only speculators benefit from oil price volatility,' Saudi Arabian Petroleum & Mineral Resources Minister Ali Naimi said in late September. 'A factor clouding the oil market future is government intervention via regulations.'

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications