The United States said it would release millions of barrels of oil from strategic reserves in coordination with China, India, South Korea, Japan and Britain to try to cool prices after OPEC+ ignored calls for more pumps. can be done.
see photosBrent crude was down 6 cents, or 0.07%, at $82.25 a barrel
Oil prices were largely stable on Wednesday as investors questioned the effectiveness of US-led oil releases from strategic reserves and turned their attention to how producers would react. Brent crude fell 6 cents, or 0.07%, to $82.25 a barrel, while US West Texas Intermediate (WTI) crude futures were down 11 cents, or 0.14%, at $78.39.
The United States said it would release millions of barrels of oil from strategic reserves in coordination with China, India, South Korea, Japan and Britain to try to cool prices after OPEC+ ignored calls for more pumps. can be done.
Japan will release “a few million kilolitres” of oil from its national reserves, but the timing has not been set, its industry minister Koichi Hagiuda said on Wednesday.
The head of the International Energy Agency said on Wednesday that some countries have not taken a supportive position on oil and gas prices, with enough supplies not reaching consumers.
Analysts said the impact on prices was likely to be short-lived following a fall in investments and a strong global recovery from the COVID-19 pandemic.
Analysts at Goldman Sachs said the coordinated release could deliver about 70 million to 80 million barrels of crude oil, more than the 100 million barrels the market is pricing in.
“On our pricing model, such a release would be less than $2 a barrel, which would be significantly less than the $8 a barrel sales that have occurred since late October,” the bank said in a note titled “A drop in the sea.” said.
US crude stocks at the Strategic Petroleum Reserve fell last week to 604.5 million barrels, the lowest since June 2003.
JPMorgan Global Commodities Research said any impact on oil prices from the release of crude may not be sustained for long. The brokerage also expects global oil demand to surpass 2019 levels by March 2022.
While attention has now shifted to how the Organization of the Petroleum Exporting Countries and its allies will react to the joint reserve release, sources said the group is not discussing halting oil production growth for now.
Sources said the group is to have two meetings next week to decide the policy.
OANDA senior market analyst Jeffrey Haley said the move to tap storage was “a one-shot surprise and the markets responded appropriately”.
US crude oil reserves rose one million barrels last week, the Energy Information Administration said, compared with analysts’ expectations of a decrease of 481,000 barrels.
US crude stocks at the Strategic Petroleum Reserve fell last week to 604.5 million barrels, the lowest since June 2003.
Andrew Lipo, President of Lipo Oil Associates, “While crude oil inventories produced by 1 million barrels, crude inventories in the Strategic Petroleum Reserve declined by 1.6 million barrels and with continued declines in product inventories, I think this Helpful for prices.” , said.
The number of active US oil rigs this week rose by six to 467, the most since April 2020, as high crude oil prices prompted some drillers to return to the wellpad.
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Record-breaking coronavirus infections in parts of Europe also pushed prices down, prompting new restrictions on movement.
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