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Market News Whether the U.S. releases oil reserves makes people wonder, oil prices hit the longest weekly streak since March

Whether the U.S. releases oil reserves makes people wonder, oil prices hit the longest weekly streak since March

On November 12, U.S. oil futures fell by 0.8 U.S. dollars and settled at 80.79 U.S. dollars per barrel; the cumulative decline this week was 0.6%, the third consecutive week of decline, setting a record for the longest weekly decline since March. U.S. President Biden has kept investors wondering whether he will take action to curb the rise in energy prices that drive inflation, putting pressure on the crude oil market in the near term

Eden
2021-11-13
9490

Friday (November 12) U.S. oil futures fell 0.8 US dollars, or 1%, and settled at 80.79 US dollars per barrel; Burrito oil fell 0.70 US dollars, or 0.8%, to close at 82.17 US dollars per barrel, two major index contracts Both fell for the third consecutive week. Investors are still speculating whether Biden will take action to curb the oil prices that have triggered a surge in inflation in the United States.

According to people familiar with the matter, several of Biden’s senior staff have discussed possible actions in the past few weeks, but they are still unable to reach a consensus. Some officials of the U.S. Department of Energy opposed the release of oil reserves, while White House staff called for the release or even a suspension of U.S. crude oil exports. White House Press Secretary Jen Psaki said that President Biden and the US government are working to find ways to reduce rising gasoline prices. She declined to comment on specific options being considered by the Biden administration. She said that the U.S. government has been urging oil-producing countries to increase crude oil production and is trying to ensure that gas stations are not driving up prices. But she declined to say whether Biden plans to release oil from the Strategic Petroleum Reserve.

As consumption rebounded after the epidemic, oil prices have risen this year, pushing US consumer prices to the fastest growth rate in 30 years. Soaring fuel and energy costs have also exacerbated global inflationary pressures. And no one thinks that price increases will fade. Societe Generale has raised its oil price forecast for 2022 by US$10 per barrel. Biden’s challenge with regard to gasoline costs is particularly evident in California, where gasoline prices are usually higher than elsewhere in the United States. According to AAA data, the current average retail price in the state is $4.65 per gallon, only 2 cents lower than the record set in 2012.

US President Biden has repeatedly hinted in recent days that he will take action to curb gasoline prices. When attending a series of international conferences in Europe earlier this month, Biden said that there are tools in the arsenal that can be used to resolve OPEC+’s refusal to increase the supply of crude oil. But without the cooperation of oil-producing countries, Biden has limited options for solving crude oil prices; Biden may order the release of oil from the strategic oil reserve, or may consider restoring the crude oil export ban. However, neither of these options is a perfect solution. Experts warn that the use of strategic reserves may only have a small impact on consumer prices, and the resumption of export bans may further disrupt the market.

Commerzbank analyst Carsten Fritsch said that the strong US dollar and speculation about the release of strategic oil reserves in the United States are negative for oil prices. If OPEC+ wants to avoid oversupply, it is necessary to reconsider next year's production plan. Rystad Energy senior oil market analyst Louise Dickson said that this week is a good reminder of the global oil market that oil prices are not only affected by the trajectory of supply and demand, but also by monetary policy forecasts and government intervention. Raising interest rates will further support the US dollar and put greater downward pressure on oil prices.

This week, U.S. energy companies added oil and gas rigs for the third consecutive week. Energy services company Baker Hughes said on Friday that as of the week of November 12, the total number of active oil and gas drilling as early indicators of future production increased by 6 to 556, which is the highest level since April 2020.

(U.S. Oil Hour Chart)

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