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The IEA confirms rumors it will release 60M barrels of oil this month in response to supply...

The IEA confirms rumors it will release 60M barrels of oil this month in response to supply disruptions from Libya. Oil remains lower by 4.5%.
Comments (13)
  • Uncle Pie
    , contributor
    Comments (2675) | Send Message
     
    the oil price is down 4.5% because they're going to "release" 60 million barrels from some reserve? Let's see, inasmuch as the world burns about 89 million barrels of oil per day, that's enough for a little over 16 hours.
    Then, of course, they will have to refill the reserve. I'm going to set the snooze alarm for 16 hours and see how things look then.
    23 Jun 2011, 09:48 AM Reply Like
  • SA Editor Stephen Alpher
    , contributor
    Comments (540) | Send Message
     
    Excellent point. IEA news is a blip (and expected, I think), like finding change in the seat cushions to pay the cable bill.

     

    Oil doesn't move 5% because of anything the IEA could say or possibly do. It's down because risk assets are down.

     

    seekingalpha.com/curre...
    23 Jun 2011, 10:13 AM Reply Like
  • kmi
    , contributor
    Comments (3979) | Send Message
     
    A 'risk off' day moving oil 5% is a bit of a stretch too. If anything you should consider that there are multiple forces at work in combination.
    23 Jun 2011, 10:20 AM Reply Like
  • SA Editor Stephen Alpher
    , contributor
    Comments (540) | Send Message
     
    Oil is going to go where the world economy goes and where risk appetites go, not where the IEA wants it to go.
    23 Jun 2011, 10:23 AM Reply Like
  • kmi
    , contributor
    Comments (3979) | Send Message
     
    So you honestly believe the IEA or the President can't 'talk it down' then?

     

    Or that spec manipulation is never in play?

     

    Since both of these have happened, and been reported on, right here.
    23 Jun 2011, 10:26 AM Reply Like
  • SA Editor Stephen Alpher
    , contributor
    Comments (540) | Send Message
     
    Of course, they can talk them down for an hour or a day or a week, and yes, speculation is in play, just as it is for AAPL or GE.

     

    If the IEA had made this announcement earlier this week when world stock markets were up 2%, its entirely possible oil would have been green.

     

    Oil vs. euro vs. S&P 500 - all moving roughly together over past year

     

    Never mind, link to chart doesn't work. Take my word for it! :)
    23 Jun 2011, 10:31 AM Reply Like
  • wyostocks
    , contributor
    Comments (7619) | Send Message
     
    30 Million from the American reserves. Obama is going on a scorched earth policy in hopes of reelection.
    23 Jun 2011, 09:51 AM Reply Like
  • OptionManiac
    , contributor
    Comments (3304) | Send Message
     
    WTF?!
    23 Jun 2011, 09:52 AM Reply Like
  • kmi
    , contributor
    Comments (3979) | Send Message
     
    Oil being released by IEA implies IEA sees growth being impacted by current prices. Gesture likely symbolic to get spec money out and force price down (successfully looks like), and also indicative of IEA sentiment.

     

    My takeaway is that oil is unlikely to increase in price in the foreseeable future.
    23 Jun 2011, 09:55 AM Reply Like
  • OptionManiac
    , contributor
    Comments (3304) | Send Message
     
    At least my two favorite dictators will be squeezed for a bit. OK, I'm an optimist. The two little men from Iran and Venezuela panic and produce more oil to keep their kingdoms propped up. I buy more CVX on the dip and smile when the recovery increases energy prices.
    Nothing ever goes my way, so the previous was a waste of my time typing.
    23 Jun 2011, 09:57 AM Reply Like
  • Tony Petroski
    , contributor
    Comments (6373) | Send Message
     
    I'm puzzled by this one. I agree with Uncle Pie that the move in crude can't be explained by the IEA announcement, but I must confess, I made it through life without even knowing there was an IEA.

     

    I'm also puzzled as to why an international organization wants to put downward pressure on oil. Doesn't our clean-green future depend on maintaining $4.00/gallon gasoline in the U.S. and $10.00/gallon (convert to Euro's if it still exists today) in Europe?

     

    Somebody's always fiddling with the market just when I bet the farm on peak oil.
    23 Jun 2011, 10:05 AM Reply Like
  • al9000
    , contributor
    Comments (53) | Send Message
     
    The price of oil has been falling for over a month. The release of 30 million barrels from the SPR makes it look like the Govt.is trying to take credit for it.
    23 Jun 2011, 10:07 AM Reply Like
  • OptionManiac
    , contributor
    Comments (3304) | Send Message
     
    Hmm...I think a few of you are right. If speculation is built into part of the price of a barrel, doesn't take much to panic the speculators. Hey, if they can manipulate the market, why not world gov'ts? Remember, not just the US releasing reserves. Makes the whole thing curious.
    23 Jun 2011, 10:22 AM Reply Like
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