Sharp fall in US oil price

New York, September 3:

Oil prices fell sharply as the international community agreed to release stocks from reserves to help avert a looming fuel crisis threatening the US. Petrol pumps have been running dry and prices soaring after Hurricane Katrina pummelled the Gulf of Mexico, the most important oil and gas producing region in the US. The Paris-based International Energy Agency, which coordinates emergency responses to energy crises among its 26 member states, said last night they had agreed to release 2m barrels a day of crude from reserves for an initial 30 days. That is roughly equivalent to the output lost in the Gulf of Mexico as oil platforms have been forced to close.

President George Bush said on Thursday that the US would release oil from its own strategic reserves. He also urged Americans to conserve fuel. But with a holiday weekend approaching,

there were long queues of people yesterday waiting to fill up at roughly $3 a gallon (roughly four litres). According to some reports, up to 15 per cent of petrol stations have run dry. The promise of fresh supplies from IEA countries, many of which are in Europe, hit prices hard. US crude fell by around $2 a barrel to $67.30, well down on the record high of $71.85 earlier in the week. Prices have doubled in the past year, driven by strong demand in the US and China at a time when supplies are stretched. The pressure was also eased by reopening of pipelines and ports along the Louisiana coastline.