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Oil on stock exchanges down; investors consider whether there will be a joint release of oil from reserves
Author:Mariusz Dasiewicz
Oil Low-cost oil on stock exchanges during Wednesday's trade, and investors are considering the chances that US President Joe Biden's administration will reach for oil from its strategic reserves as part of coordinated action with other countries, including China," the brokers inform.
West Texas Intermediate oil supply for December at the NYMEX fuel exchange in New York City costs $79.93, less 1.03%.
Brent on the ICE in London in deliveries for January is valued at US$81.55 per barrel, lower by 1.07 percent.
U.S. President Joe Biden's administration assesses the effects of oil from the strategic U.S. reserves of this raw material in order to lower high gas prices in the US.
The Chinese authorities may also participate in such a coordinated action, and the matter of joint action was reported by the US at a virtual summit between Joe Biden and Chinese leader Xi Jinping held on Tuesday.
"South China Morning Post" reported, citing unofficial sources that Beijing is open to such a proposal from the US, but has not yet undertaken to take concrete action.
The issue of joint release of oil from reserves – by the US and China – was also discussed earlier during a telephone conversation between China's Foreign Minister Wang Yi and US Secretary of State Antony Blinken.
"China is open at the request of the US, but has not yet undertaken to take concrete measures because they have to take account of the need for consumption on the domestic market," said the "South China Morning Post".
"If China cooperates with the US to lower energy prices, it will, of course, +bears+ for oil prices," says Kim Kwangrae, Senior Raw Materials Markets Analyst at Samsung Futures Inc.
Meanwhile, oil stocks are growing in the US – at least this is the result of an industry report by the American Institute of Fuels (API), which reported that oil stocks increased by 655,000 barrels last week.
Stocks of petrol fell by 2.79 million barrels last week, and distilled fuels, including fuel oil, increased by 107 thousand barrels, according to the API report.
Official data on oil stocks and its products in the US will be provided by the Department of Energy on Wednesday.
By mid next year oil could cost US$120 per barrel, because the ability of OPEC+ alliance countries to meet demand is at risk – such forecasts for oil markets have, in the meantime, the heads of Russian company Rosnieft PJSC.
"Today OPEC+ countries must not increase oil production to the extent necessary to meet demand," warns Otabek Karimov, Vice President of Rosnieft on Trade and Logistics.
"As a result, there is a very serious energy deficit worldwide," he stresses.
Source: PAP
