Kolkata: There ere early indications of crude oil prices moving south on Wednesday, March 11. According to reports, oil prices declined after the Wall Street Journal state that the International Energy Agency has proposed big release of oil reserves. The release will be the largest in the history of the International Energy Agency and has been designed keeping in mind the urgent need to bring down crude oil prices which have surged, thanks to the Iran US conflict that began on Feb 28.
Brent futures were trading down 23 cents, or 0.26% lower, at $87.57 a barrel on early Wednesday morning, stated reports. On the other hand, the other benchmark, US West Texas Intermediate was down 37 cents, or 0.44%, to trade at $83.08 a barrel.
The price and supply of crude oil is the real point of concern for most countries after the Iran US conflict began on Feb 28. After crude prices breached $115 a barrel on Monday, the prices have cooled a bit. On Tuesday, the prices eased after US president Donald Trump said that the end of the war was near. The reports of G7 countries considering release from their strategic reserves also cooled prices a bit.
Historic high and recent highs
The all-time peak of Brent crude oil was witnessed in July 2008. The price level reached about $147.50 a barrel at that time.
However, crude oil prices have been moving up and down since the conflict broke out between the US-Israel combine and Iran. Data suggest volatility in the past 12-13 days. The high was a four-year high which was followed by a sharp decline. The surge took place between Feb 28 and March 9, when prices rose from about $72-73 a barrel on February 28 to above $115 on March 9. The price retreated on March 10 and 11 with a nearly 14% decline. Reports said the pullback was till $86.50-87 a barrel. While US President Donald Trump indicated that the war could end soon, the IEA also jumped into action.
The real driver of prices was Iran’s decision to shut down the Strait of Hormuz, through which one-fifth of the world’s maritime oil supply passes. It is a vital element in the world energy supply ecosystem.