Oil prices stabilize after swings on prospect of crude inventory release

Oil drilling rigs in a calm ocean channel, Cromarty Firth, Scotland, UK

Abstract aerial art | Digital vision | Getty Images

Oil prices stabilized on Friday as investors caught their breath after a day of wild swings sparked by the prospect of coordinated action by major global economies to free official crude reserves from inventories.

Brent crude rose 28 cents or 0.3% to $ 81.52 a barrel at 1:45 a.m. GMT, after falling to a six-week low on Thursday before rebounding to close 1.2% higher.

US crude rose 19 cents to $ 79.20 a barrel, after crossing a range of over $ 2 the previous session before closing. Both are heading for a fourth week of decline.

The market swings followed a Reuters report that the United States asked China, Japan and other big buyers to join a release of crude stocks from strategic oil reserves (SPR ).

“The market remains fundamentally tight and published volumes are unlikely to significantly alter the global balance,” commodities analysts at Fitch Solutions said in a note. “As such, we expect any price drop to be limited in both scale and duration.”

Pressure from the Biden administration for a coordinated release of oil stocks has been seen as a signal to the OPEC + production group that it should increase production to address concerns over high fuel prices in the world’s largest economies. , starting with the United States, China and Japan.

OPEC +, which brings together the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers, has maintained what analysts say is an unprecedented hold on production, even as prices have since rebounded. the depths of the early stages of the coronavirus pandemic.

Meanwhile, data showing Saudi Arabia’s oil exports peaked in eight months in September, increasing for a fifth consecutive month, also helped keep prices under control.

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Felix J. Dixon