Oil falls again due to IEA promises

Oil fell again on Thursday on promises by member countries of the International Energy Agency (IEA) to use reserves to contain prices.

North Sea Brent futures for June delivery were down 49 cents, or 0.48%, at $100.58 in London. During the day it reached below 100 dollars for the first time since March 17.

In New York, a barrel of West Texas Intermediate (WTI) for May delivery fell 20 cents, or 0.21%, to $96.03.

Mexico’s export mix lost 1.62%, or $1.54, on Thursday at $93.43 a barrel.

Since Thursday of last week, the United States promised to inject at least 180 million barrels of its strategic reserves into the market, while the other IEA countries promised to incorporate 60 million barrels, for a total of 240 million.

“The market digests this,” said Stephen Schork, an analyst at the Schork Report. “We are in the adjustment phase right now,” he summed up.

Traders also anticipate a drop in demand from China, which had 21,000 new coronavirus cases on Wednesday, a new record.

“We haven’t tacked,” Stephen Schork remarked. “In the long term, there remains a structural imbalance between supply and demand.”

A sign that the relaxation is relative, the Brent contracts for July 2022 to April 2023 registered a rise on Thursday, in particular for the more distant maturities in time. Traders anticipate further tensions once IEA barrels are used.

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