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Crude oil – price. The US and China can help the market

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Crude oil on Thursday morning is cheaper on the stock exchanges. More raw material may appear on the market soon. The US has asked the most oil-consuming countries, including China and India, to release fuel reserves. Information has emerged that the Middle Kingdom has responded positively to Washington’s appeal.

The West Texas Intermediate barrel for December delivery on the NYMEX fuel exchange in New York on Thursday morning was $ 76.67, down 1.13 percent. A barrel of WTI crude oil has been the cheapest since the beginning of October this year.

Brent on ICE in London for January deliveries was valued at $ 79.54 a barrel, down 0.92 percent.

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Crude oil – talks between the US and China

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President Joe Biden’s administration has asked the most crude oil-consuming countries, including China and India, to release held oil stocks as part of a joint effort to lower global energy prices, the Reuters Agency said on Thursday.

The call comes as the US leader faces political pressure from rising consumer costs linked to economic reactivation and an economic rebound from the lows of the start of the COVID-19 pandemic.

The US administration’s step is also due to the US administration’s disappointment with the lack of response from the countries of the Organization of Petroleum Exporting Countries and their allies (OPEC +) to Washington’s calls to accelerate the growth of production of the world’s coveted oil, Reuters pointed out. During the November OPEC + summit it was agreed to maintain plans to increase oil production by 400 thousand barrels per day. Countries rejected US calls for increased production rates. Producers were afraid of acting too quickly, for fear of repeated failures in the fight against the COVID-19 pandemic.

In 2011, during the ongoing war in Libya, the United States and its foreign partners coordinated the release of oil reserves. However, Thursday’s appeal is unprecedented, as it concerns the world’s largest importer of this raw material – China.

Earlier, anonymous sources reported that US President Joe Biden and Chinese leader Xi Jinping talked at a virtual summit on Tuesday to release oil from strategic reserves, but have yet to make final decisions on the matter.

However, information appeared on the market that China is working on releasing oil from its strategic reserves. – Work is underway to release crude oil – said a spokeswoman for the Chinese National Food Administration and Strategic Reserves. For the time being, it is not clear whether the Chinese authorities will reach for their strategic oil reserves in response to Washington’s “invitation” or whether they had such plans in the past.

Other Asian countries are also considering such a step. “We are thoroughly analyzing the US application (…). We could release (oil) reserves in the event of fluctuating supply, but not in response to rising raw material prices” – commented the representative of the South Korean administration, to whom the White House also addressed the call, apart from Japan .

Reaching for oil from reserves would aim to ensure stability in global energy markets after US oil prices reached their 7-year high last month. On Wednesday, crude oil in the US declined by 3%, to the lowest level in 6 weeks.

Main photo source: Shutterstock



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