Oil price steadies after US storage release, focus on OPEC+ reaction

Oil price steadies after US storage release, focus on OPEC+ reaction

/ Oil & Gas / Thursday, 25 November 2021 09:46

Oil prices remained steady after a US-led release of oil from strategic reserves even as investors have questioned the effectiveness of the move and are keen on knowing how the oil producers will respond.

Brent crude was up 17 cents, or 0.2%, at $82.48 a barrel while US West Texas Intermediate crude futures rose 7 cents, or 0.1%, to $78.56.

US will release 50 million barrels from the US Strategic Petroleum Reserves (SPR), which will start hitting the market in mid to late December. Japan has said it will release “a few hundred thousand kiloliters” of oil from its national reserve. China remains noncommittal about its intentions to release oil from its reserves as requested by the US.

International Energy Agency (IEA) has lamented about some countries not doing enough in helping to ease oil and gas prices. Analysts are less optimistic about move’s effect on prices given the years of declining investment and a strong global recovery from the COVID-19 pandemic.

The coordinated release could add about 70 million to 80 million barrels of crude supply, smaller than the more than 100 million barrels the market has been pricing in, analysts have said.

Given this development, the reaction of the Organization of the Petroleum Exporting Countries, Russia and their allies has been highly anticipated.

According to news agency sources, OPEC will hold two meetings next week to set policy on Dec. 1 for OPEC members only and Dec. 2 for OPEC+.

Meanwhile, the ministry of energy and infrastructure has stated that the UAE remains fully committed to the Declaration of Cooperation (OPEC+) and will abide by the decision taken collectively by the OPEC+ group in its next meeting, according to a statement issued by the ministry.

US crude stockpiles rose 1 million barrels last week as per the Energy Information Administration, compared with analysts' expectations for a decrease of 481,000 barrels.

US crude stocks in the Strategic Petroleum Reserve fell last week to 604.5 million barrels, their lowest since June 2003.

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