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Market News International oil prices are going up and down, IEA claims that the gap between supply and demand is artificial, and how OPEC+ will respond

International oil prices are going up and down, IEA claims that the gap between supply and demand is artificial, and how OPEC+ will respond

On November 25, international oil prices were mixed, and major consumer countries urgently released reserve crude oil in order to cool the market, but data showed that the US fuel demand was steady. Investors await how the major oil-producing countries will respond to this. The Director of the International Energy Agency, Birol, said that the oil market is suffering from man-made supply gaps.

2021-11-25
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On Thursday (November 25), international oil prices were mixed, and major consumer countries urgently released reserve crude oil in order to cool the market, but data showed that US fuel demand was stable. Investors await how the major oil-producing countries will respond to this.

At GMT+8 16:33, NYMEX crude oil futures fell 0.09% to 78.32 US dollars per barrel; ICE Brent crude oil futures rose 0.11% to 81.13 US dollars per barrel.


ANZ analysts said in a report: “The release of oil from strategic reserves has intensified the competition among the world’s largest oil producers for control of the oil market. We don’t expect OPEC to stand idly by when the market enters a critical period. ."

High oil prices have exacerbated inflation concerns. The US Department of Energy has initiated an auction, which will provide about 32 million barrels in exchange, and the delivery time is set between late December and April 2022. Oil companies that accept crude oil must return it later, plus interest. The Department of Energy plans to release another 18 million barrels of reserves soon.

International Energy Agency (IEA) Director Birol said on Wednesday that the oil market is suffering from man-made supply gaps. He hopes that the Organization of the Petroleum Exporting Countries and the oil-producing allies (OPEC+) will take more measures to keep oil prices down at the upcoming meeting.

Since August, OPEC+ has adhered to the policy of increasing production by 400,000 barrels per day per month, ignoring the appeals of major oil-consuming countries such as the United States to accelerate production. The US Energy Information Administration (EIA) said on Wednesday (November 24) that US crude oil inventories rose last week, but gasoline and distillate inventories fell, and refining activities increased due to strong overall fuel demand.

All eyes are now on the Organization of Petroleum Exporting Countries and its partners (OPEC+). They will meet next week to discuss the prospects of the oil industry and announce new industrial policies. OPEC+ sources said that although the United States, Japan, India and other countries have decided to release crude oil reserves, OPEC+ has not discussed the suspension of production increases.

Rystad Energy analyst Louise Dickson said in an email comment: "The bold move by crude oil importers opens the door for OPEC+ to adjust its supply policy downwards at the next (meeting) on December 2, 2021."

The UAE’s national news agency WAM quoted the country’s Ministry of Energy as a report on Thursday that the United Arab Emirates fully cooperates with the OPEC+ agreement and has no “preset position” before the upcoming meeting on December 2.

Bob Yawger, head of energy futures at Mizuho Securities, said that the current oil release is unlikely to have a huge impact on the market, because most of the US release arrangements are loans, rather than direct sales, and the amount released by its international partners is not large. .

But ANZ said that the release of oil reserves may lead to market surplus. ANZ Bank predicts that OPEC+ will suspend its supply increase plan from January, which may cushion the weak impact of market demand headwinds and support the price of Brent crude oil at $80 per barrel.
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