Crude prices fell on Friday following confirmation that more strategic oil reserves will be released to alleviate the market following the impact of the Katrina hurricane which cut United States production by an estimated 30%.
Prices which during the week had broken through the 70 US dollars per barrel benchmark slid to the range of 67 US dollars pb once the Paris based International Energy Agency said it would release two million barrels per day for an initial period of thirty days.
This week the United States also released its Strategic Petroleum Reserve and softened environmental requirements for refineries in the hurricane affected states with the purpose of increasing supply and containing prices.
The International Energy Agency made up of France, Germany, Japan and Britain, has a combined reserve of four billion barrels, a third of it for emergency use.
According to the American Petroleum Institute 95% of oil production in the Gulf of Mexico, representing 30% of total US crude production has been closed down since August 26.
A primary inventory indicated 58 offshore platforms and drilling rigs have been disabled and it's yet unknown when production will resume.
Gasoline prices in the US have rocketed in the last twelve months from an average 1,86 US dollars per gallon to over 2,70 US dollars.
But in spite of the greater availability of oil from the released reserves another stumbling block is available shipping capacity, plus the condition of some of the pipelines in the devastated area along the Gulf of Mexico coastline.