Crude Price Drops After IEA Sends Oil to the US

THE international oil watchdog helped wrestle rocketing crude prices down yesterday by sending millions of barrels of petrol and heating oil to the US.

Crude prices dropped more than $2 to $67.50 the lowest level since Hurricane Katrina hit the Gulf Coast.

Oil and gasoline prices have rocketed since the storm, driven largely by the closure of 10 major US refineries. President George Bush has urged Americans to use their cars only when absolutely necessary, with a fully-fledged energy crisis taking hold.

The hurricane has damaged or displaced an estimated 58 oil rigs in the Gulf of Mexico, the American Petroleum Institute said. Of these, some 30 rigs have been reported lost.

The International Energy Agency, which holds emergency oil reserves of the world’s 26 major industrial nations, said it would send 2m barrels a day worth of oil products from Europe in the next 30 days.

The relief is crucial, because although the US has built up record levels of crude oil reserves, it is short of gasoline and heating oil.

It is the first time the IEA has had to dip into its emergency reserves since 1991, when oil prices shot up during the first Gulf War.

The dollar fell again as the scale of the disaster grew, dropping 11/4 cents against the pound to $1.8413.

Lloyd’s of London expects claims worth around Pounds 1bn, insurance authority Lloyd’s List claimed.