Oil Rises – US Strategic Stocks Released Not ‘Convincing’

LAST UPDATE: 16:39

Despite temporary pressure on oil prices following the White House announcement that the United States plans to release up to 50 million barrels of crude oil from its strategic reserves in the coming months to normalize sparked fuel prices, its contracts argon returned very quickly to an upward trajectory.

As announced, the US move will be combined with the release of strategic reserves from other countries, such as China, India, South Korea, Japan and Great Britain.

However, the market does not seem to be “convinced” by the announcement, with analysts attributing the rapid recovery in oil prices on the one hand to the fact that the release of strategic stocks from the US was lower than expected, and on the other to the fact that form of loan and sale.

In particular, as announced by the White House, the release will be in two parts: 32 million barrels will be available in the coming months in the form of exchange, which will be restored in the coming years, while 18 million barrels will be sold as part of its acceleration. approved by Congress.

The White House added, however, that the US is ready to take additional measures, if necessary, in order to normalize crude prices.

The United States has the largest strategic oil reserves in the world, with an approved capacity of 714 million barrels, which belong to the federal government and are stored in underground caves at four locations along the Gulf of Mexico coastline.

As of November 12, US reserves stood at 606.1 million barrels of crude, after withdrawing 11.6 million barrels in October.

Oil prices have fallen below $ 80 a barrel in recent days from a three-year high of $ 86 a barrel on October 25, thanks to reports that talks are under way between major oil consuming countries to release coordinated strategic reserves. and fears of another possible blow to demand from the fourth wave of the pandemic hitting Europe.

On Monday, however, oil prices recorded gains of more than 1% amid reports that OPEC + could adjust its planned output increases if major oil consumers were to coordinate the release of strategic stocks.

And today, despite earlier pressures, prices continue to move higher, with the January contract for US crude, West Texas Intermediate, rising by $ 1.07 or 1.39% to $ 77.82 a barrel , and Brent crude for January delivery hit $ 80 a barrel again, adding $ 1.15, or 1.44%, to $ 80.85.