The price of oil yesterday fell to its lowest since the start of the Libyan conflict as markets prepared for a global release from crude reserves.
Brent, the European benchmark, fell below US$103 as markets accounted for the potential impact of an extra 60 million barrels of oil set to start arriving on the market on Friday.
A group of major consuming nations announced last week a co-ordinated effort to make up for the shortfall from Libya, where civil war, soon to enter its fifth month, has erased most of the country's daily production - 1. 6 million barrels.
Nobuo Tanaka, the executive director of the International Energy Agency (IEA), an organisation representing the interests of 28 oil-importing countries, said the agency was prepared to take further action if necessary.
The IEA sits on a 1.6 billion barrel stockpile that would allow it single-handedly to pump an extra 2 million barrels per day (bpd) into the market for the next two years.
The announced release of 2 million bpd over the next month has drawn the ire of some members of Opec, which was meeting the EU yesterday in Vienna.
"The question is, why aren't consuming countries abiding by their own principles and instead are interfering in the market?" Mohammad Aliabadi, Iran's caretaker oil minister, said in Vienna.
The timetable for Libya's oil industry to resume pumping the light, sweet crude prized by refiners remains uncertain, with violence continuing and the damage to oilfields and infrastructure yet to be assessed.
"It's all linked to how the conflict unfolds," said Henry Smith, the Libya analyst with Control Risks, a risk assessor in London.
Oil led a slump in commodities markets yesterday, as Standard & Poor's GSCI, an index of 24 raw materials, fell to 635, its lowest since January.
Today a Group of 20 subcommittee on commodity price volatility meets in Paris as France pushes for higher regulation of a market in which trader speculation, it asserts, has too much influence.
The UAE, where oil revenue accounts for about a third of GDP, is expected to oppose any increased regulation of its core industry.
* with Bloomberg News