Tuesday, September 6 2005 12:39 Hrs (IST) - World Time -

Singapore: Oil prices fell below 67 dollars a barrel in Asian trade today (Sept 6, 2005) as industrial powers pledged to release emergency supplies of crude, easing worries of tight supplies in the aftermath of Hurricane Katrina, dealers said.

At 10:30 am (0900 IST), New York's main contract, light sweet crude for delivery in October was down 1.10 dollars to 66.47 dollars from its close of 67.57 dollars in the United States Friday.

Markets in the US were closed yesterday (Sept 5, 2005) for the Labor Day holiday.

The International Energy Agency's (IEA) announcement Friday that all its 26 members will tap into their strategic oil reserves had a huge calming effect on the market after Katrina slammed into the Gulf of Mexico, a key US oil producing region, dealers said.

"The IEA efforts will include both crude oil stocks and product stocks like gasoline," said Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore.

He said the immediate impact was that, "the speculative element has been taken out of the market for now, so prices have been dropping."

The Paris-based IEA said Friday its 26 members will tap into their strategic oil reserves and pour 60 million barrels into the market in a month to cope with disruptions in the aftermath of Hurricane Katrina.

The initiative will make available to the market two million barrels of strategic oil reserves a day for an initial period of 30 days.