Email of the day (1)
Comment of the Day

June 28 2011

Commentary by Eoin Treacy

Email of the day (1)

on who will purchase the additional supply released from IEA stockpiles:
"I cannot help but wonder how much of the 60 million barrel SPR release will find its way into the SPR of China? "

Eoin Treacy's view Thank you for this question. Oil is a fungible asset so excess supply in one area will have a knock-on effect on prices elsewhere. I suspect the IEA's announcement that it is going to release supply from its strategic reserves is as much about sentiment and attempting to dampen speculative interest as it is about global supply. China is currently experiencing power outages so it is unlikely to be adding to its stockpiles at this stage and there is speculation that it may also be considering joining the IEA in releasing supply.

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