SINGAPORE, September 3, 2008 (AFP) – Oil prices fell in Asian trade Wednesday as the US government announced the release of oil from its strategic reserve to help with recovery efforts after Hurricane Gustav.
New York’s main contract, light sweet crude for October delivery, dropped 34 cents to 109.37 dollars a barrel, while Brent North Sea crude for October delivery eased 29 cents to 108.05.
The United States announced Tuesday it was releasing 250,000 barrels from its emergency supplies, known as the strategic reserve.
“The release of the oil will prevent any shortage and that will, of course, help calm the market,” said Victor Shum, a Singapore-based analyst with energy consultancy Purvin and Gertz.
The US Strategic Petroleum Reserve is a complex of underground storage caverns that hold emergency supplies of crude oil. According to the US Department of Energy, the inventory exceeded 700 million barrels on April 2.
The US Department of the Interior said there was no oil production Tuesday in the hurricane-affected region, where a quarter of US oil is normally produced. Ninety-five percent of natural gas production was offline.
The threat from Gustav raised grim memories of the 20