Oil prices edged above $91 a barrel on Friday, steadying after a big drop the day before when the IEA announced the release of emergency crude supplies, as per Associated Press. Oil for August delivery rose to US91.6 on the Nymex, while in London, Brent crude for August delivery dipped to US$106.9 on the ICE Futures exchange.
Nymex crude fell by over US$4.39 to settle at US$91.02 on Thursday after the International Energy Agency said it will make 60 mln barrels available over a 30-day period, half of which will come from the U.S. Strategic Petroleum Reserve. This move likely reflected increasing concern that the global economy is slowing, and that high oil prices boost inflation and dampen consumer demand. "We think the IEA did the right thing, since we believe that world economies were on the verge of a dangerous energy-induced slowdown, if not an outright recession," said Edward Meir at MF Global in New York. "Breaking the back of this price spiral was therefore important in so far as some of the recent inflationary gains will now likely be reversed — assuming energy prices continue trending lower — while more importantly, central banks in key emerging markets will be less inclined to raise rates."
Earlier this week, Federal Reserve Chairman Ben Bernanke warned that the U.S. economy is weaker than previously forecast, and lowered this year's gross domestic product growth estimate to 2.9% from 3.3%.