Oil prices rise following reports OPEC + may reassess production

A worker takes a sample of crude oil from an oil well operated by the Venezuelan state oil company PDVSA in Morichal, Venezuela, July 28, 2011. REUTERS / Carlos Garcia Rawlins

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  • OPEC + could reassess increase in oil production – reports
  • Japan and India are working on the release of oil stocks at the request of the United States
  • Europe grappling with fourth wave of COVID-19 infections

NEW YORK, Nov. 22 (Reuters) – Oil prices rose on Monday, rebounding from recent losses, following reports that OPEC + may adjust its plans to increase oil production if major consuming countries release of crude from their reserves or if the coronavirus pandemic slows demand.

Brent crude futures rose 37 cents to $ 79.26 a barrel at 12:01 a.m. EST (1701 GMT). WTI crude futures rose 33 cents to $ 76.27 a barrel.

Benchmark Brent and US West Texas Intermediate (WTI) crude prices fell more than $ 1 early in the session, reaching their lowest levels since October 1.

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US President Joe Biden is preparing to announce the release of oil from the country’s Strategic Petroleum Reserve (SPR) in conjunction with several other countries as early as Tuesday, Bloomberg reported on Monday. Reuters has yet to verify the report. Read more

Japanese and Indian officials are working on ways to free up national crude oil reserves in tandem with the United States and other major economies to bring prices down, seven government sources with knowledge of the plans told Reuters. Read more

The talks came after the U.S. government was unable to persuade the Organization of the Petroleum Exporting Countries and its allies, including Russia, known as OPEC +, to pump more oil with the major producers claiming there is no shortage of crude oil.

The producer group agreed this month to stick to plans to increase oil production by 400,000 barrels per day (bpd) from December.

Oil prices rose after Bloomberg News reported that OPEC + may change its plans to continue ramping up production, citing delegates. Reuters did not verify the report.

“OPEC is sending the signal that if these players do that, they have barrels that they can hold back and will offset the impact of an exit,” said Phil Flynn, senior analyst at Price Futures in Chicago.

Joseph McMonigle, secretary general of the Riyadh-based International Energy Forum, said on Monday that he expects OPEC + to maintain its plan to gradually supply the market.

“I see them sticking to their current plan in light of the oversupply for next year, which is typical of oil markets in the first quarter,” he said. “If they are going to make a change, it will be because of unforeseen external factors, such as these bottlenecks in Europe, any kind of strategic release and changes in the demand for jet fuel.”

Any publication from SPR would only affect prices for two or three weeks, said Fereidun Fesharaki, chairman of consultancy firm Facts Global Energy.

The combined release of SPR could be 100 to 120 million barrels or even more, Citi analysts said in a note dated Nov. 19. That includes 45-60 million barrels from the United States, about 30 million barrels from China, 5 million barrels. India and 10 million barrels each from Japan and South Korea, the bank estimated.

Concerns about demand were fueled by the prospect of national lockdowns in Europe, which put pressure on prices.

Austria entered its fourth national lockdown on Monday as Europe once again becomes the epicenter of the coronavirus pandemic. Germany could also impose new restrictions, with politicians debating a lockdown for unvaccinated people. Read more

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Reporting by Stephanie Kelly in New York; Additional reporting by Bozorgmehr Sharafedin in London, Sonali Paul, Naveen Thukral and Florence Tan in Singapore, Aaron Sheldrick in Tokyo Editing by David Goodman, Alexander Smith and David Gregorio

Our standards: Thomson Reuters Trust Principles.

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Felix J. Dixon