This is the third time in the IEA's history that its members have decided to release stocks.
The announcement came after the Organization of Petroleum Exporting Countries (OPEC) failed to increase production at a meeting on June 8. IEA took such decision to to fill up the gap left by OPEC member Libya's output disruption and to ease current crude prices. The recent troubles in Libya had removed 132 million barrels of light, sweet crude oil from market by the end of May, according to IEA.
Libya was exporting about 1.2 million barrels per day (bpd) before the revolt that brought its oil industry to a stalemate situation, which in turn pushed up the prices.
IEA further said that it would release 2 million barrels per day over initial 30 days.
The United States, the world's largest oil-consuming nation would release 30 million barrels from its Strategic Petroleum Reserve, which stands at capacity of 727-million barrel reserve.
On Thursday just after the data was out, MCX crude futures for June delivery closed lower by Rs 142 (3.3%) at Rs 4,141/barrel. Natural gas for June delivery closed at Rs 188.9, lower by Rs 5.4 (2.8%).
Praveen Kumar, Head of the South Asia Oil and Gas Team from FACTS Global Energy, in an interview to a leading news channel said, 'Brent price would go down to about USD 100 per bbl towards the end of this year.'
He further said, 'the fall in crude price is good for refiners in India who import some of the West Africa crude.'