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Market News The U.S. releases its oil reserves on OPEC, and oil prices need to pay attention to this key event next!
The U.S. releases its oil reserves on OPEC, and oil prices need to pay attention to this key event next!
Before the New York market on November 23, oil prices rose slightly, and the price of Brent crude oil once returned to above the 80 mark. It was previously reported that if the United States, Japan and other countries release crude oil reserves, or the epidemic in Europe suppresses demand, OPEC+ may adjust and shrink its production increase plan. However, the pressure on the release of reserves and worries about the worsening of the epidemic in Europe still put pressure on oil prices.
2021-11-23
11698
On Tuesday (November 23) before the New York market, oil prices rose slightly, and Brent crude oil prices once returned to above the 80 mark. It was previously reported that if the United States, Japan and other countries release crude oil reserves, or the epidemic in Europe suppresses demand, OPEC+ may adjust and shrink its production increase plan. However, the pressure on the release of reserves and worries about the worsening of the epidemic in Europe still put pressure on oil prices.
According to people familiar with the matter, US President Biden is preparing to announce the release of oil from the US Strategic Petroleum Reserve as early as Tuesday, local time, together with several other countries. According to two people familiar with the matter, the situation is still changing and plans may change, but the United States is considering releasing more than 35 million barrels of crude oil after a period of time.
This will be the largest release of crude oil reserves from major economies under the support of the International Energy Agency (IEA). Previous efforts to exploit global oil reserves were coordinated by the International Energy Agency. For example, after the turmoil in Libya in 2011 and supply disruptions, the International Energy Agency released 60 million barrels of oil.
On Saturday, Japanese Prime Minister Fumio Kishida said that the Japanese government is considering coordinating with the United States and other countries to release foreign exchange reserves. On Tuesday, a senior government official in India said that India plans to release about 5 million barrels of crude oil from its emergency reserves, and work with other major economies to cool prices.
This move may prompt OPEC+ to re-evaluate its plan to restore oil supply. Helima Croft, chief commodity strategist at RBC Capital Markets, said: "This move may increase the stakes in this game and may bring new tension to the bilateral relationship between Washington and Riyadh."
This battle may be the biggest turmoil in the oil geopolitical field since the price war between Saudi Arabia and Russia in early 2020. This also shows the tension between Washington and Riyadh, which has always been the cornerstone of US relations in the Middle East.
On Tuesday, UAE Energy Minister Suhail Al-Mazrouei said that OPEC+ does not need to increase oil production at a faster rate, despite requests from countries such as the United States and Japan to help ease the pressure on gasoline prices.
Mazrui said: "There is no logic to increase our production. I don't think we will change the plan." He reiterated his belief that the oil market will turn from a shortage of supply to an oversupply in the first quarter of next year. Both Mazrui and Saudi Foreign Minister Salman said that OPEC+ should not expand the scale of production because the epidemic may still weaken consumption.
Mazrui said: "OPEC+ will meet on December 2. We will review the market situation and supply, and then make a decision based on these facts."
The 23-nation coalition has rejected Biden’s call earlier this month to speed up the restoration of supplies that were interrupted during the epidemic. During a private discussion, OPEC+ representatives said that even if OPEC+ had previously planned a small increase in production, it may now be reassessed at the meeting next week.
On Monday, Joseph McMonigle, Secretary-General of the International Energy Forum, based in Riyadh, said in a statement: “I expect OPEC+ Energy Minister to maintain the current plan to gradually add more supply to the market. However, certain unforeseen external factors, Such as the release of strategic reserves or new European blockade measures may prompt a reassessment of market conditions."
OPEC+ will hold its next meeting on December 2. It is expected that the increase in output of 400,000 barrels per day will be maintained at the meeting, but the organization also stated that it will adopt flexible measures that can be slower or faster according to the speed of changes in demand.
On Tuesday (November 23), oil prices rose for the second consecutive trading day, and Brent crude oil futures broke through the US$80 mark within the day. It is worth noting that although OPEC+'s statement limits the decline in oil prices, the background of risk aversion may make oil prices go downward. At the same time, the market will pay attention to the changes in API crude oil inventories for the week of November 19 in the United States, which is scheduled to be announced on Wednesday morning at GMT+8, and has obtained further clues about the trend of oil prices.
(Daily chart of Brent crude oil futures)
GMT+8 At 20:08 on November 23, the price of Brent crude oil futures reported $78.74/barrel.
U.S. plans to coordinate the release of oil reserves
According to people familiar with the matter, US President Biden is preparing to announce the release of oil from the US Strategic Petroleum Reserve as early as Tuesday, local time, together with several other countries. According to two people familiar with the matter, the situation is still changing and plans may change, but the United States is considering releasing more than 35 million barrels of crude oil after a period of time.
This will be the largest release of crude oil reserves from major economies under the support of the International Energy Agency (IEA). Previous efforts to exploit global oil reserves were coordinated by the International Energy Agency. For example, after the turmoil in Libya in 2011 and supply disruptions, the International Energy Agency released 60 million barrels of oil.
On Saturday, Japanese Prime Minister Fumio Kishida said that the Japanese government is considering coordinating with the United States and other countries to release foreign exchange reserves. On Tuesday, a senior government official in India said that India plans to release about 5 million barrels of crude oil from its emergency reserves, and work with other major economies to cool prices.
This move may prompt OPEC+ to re-evaluate its plan to restore oil supply. Helima Croft, chief commodity strategist at RBC Capital Markets, said: "This move may increase the stakes in this game and may bring new tension to the bilateral relationship between Washington and Riyadh."
OPEC+ warns of next week or re-evaluation of the scale of production increase
This battle may be the biggest turmoil in the oil geopolitical field since the price war between Saudi Arabia and Russia in early 2020. This also shows the tension between Washington and Riyadh, which has always been the cornerstone of US relations in the Middle East.
On Tuesday, UAE Energy Minister Suhail Al-Mazrouei said that OPEC+ does not need to increase oil production at a faster rate, despite requests from countries such as the United States and Japan to help ease the pressure on gasoline prices.
Mazrui said: "There is no logic to increase our production. I don't think we will change the plan." He reiterated his belief that the oil market will turn from a shortage of supply to an oversupply in the first quarter of next year. Both Mazrui and Saudi Foreign Minister Salman said that OPEC+ should not expand the scale of production because the epidemic may still weaken consumption.
Mazrui said: "OPEC+ will meet on December 2. We will review the market situation and supply, and then make a decision based on these facts."
The 23-nation coalition has rejected Biden’s call earlier this month to speed up the restoration of supplies that were interrupted during the epidemic. During a private discussion, OPEC+ representatives said that even if OPEC+ had previously planned a small increase in production, it may now be reassessed at the meeting next week.
On Monday, Joseph McMonigle, Secretary-General of the International Energy Forum, based in Riyadh, said in a statement: “I expect OPEC+ Energy Minister to maintain the current plan to gradually add more supply to the market. However, certain unforeseen external factors, Such as the release of strategic reserves or new European blockade measures may prompt a reassessment of market conditions."
OPEC+ will hold its next meeting on December 2. It is expected that the increase in output of 400,000 barrels per day will be maintained at the meeting, but the organization also stated that it will adopt flexible measures that can be slower or faster according to the speed of changes in demand.
On Tuesday (November 23), oil prices rose for the second consecutive trading day, and Brent crude oil futures broke through the US$80 mark within the day. It is worth noting that although OPEC+'s statement limits the decline in oil prices, the background of risk aversion may make oil prices go downward. At the same time, the market will pay attention to the changes in API crude oil inventories for the week of November 19 in the United States, which is scheduled to be announced on Wednesday morning at GMT+8, and has obtained further clues about the trend of oil prices.
(Daily chart of Brent crude oil futures)
GMT+8 At 20:08 on November 23, the price of Brent crude oil futures reported $78.74/barrel.
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