Oil slips, pending OPEC + response to US-led crude release, Auto News, ET Auto
By Sonali Paul and Florence Tan
MELBOURNE / SINGAPORE: Oil prices were little changed on Thursday as investors waited to see how major producers react to the emergency release of crude by major consuming countries aimed at cooling the market, even as data indicated healthy US fuel demand .
Brent crude futures slipped 3 cents to $ 82.22 a barrel at 0351 GMT, after losing 6 cents on Wednesday.
US West Texas Intermediate (WTI) crude futures fell 9 cents, or 0.1%, to $ 78.30 a barrel, extending an 11-cent loss on Wednesday.
“The release of oil from strategic reserves intensifies competition for control of the oil market among the world’s largest producers,” ANZ analysts said in a note.
“We don’t expect OPEC to sit idly by as the market enters a critical period.”
All eyes are now on the Organization of the Petroleum Exporting Countries, Russia and their allies, called together OPEC +, which are due to meet next week to discuss oil demand and supply.
“The bold move by oil importers opened the door for OPEC + to adjust its supply policy downward at its next (meeting) on December 2, 2021,” Rystad Energy analyst Louise Dickson said in comments sent by email.
The group has added 400,000 barrels per day of supply since August, reversing record production cuts made last year when the pandemic dampened demand. OPEC + will meet on December 2 to decide whether or not to increase production by an additional 400,000 bpd in January.
Three sources told Reuters that OPEC + has no plans to halt the increase in its oil production, despite the decision by the United States, Japan, India and others to release oil stocks emergency.
High oil prices added to inflationary fears. A coordinated release of the state’s oil reserves led by the United States could add an estimated 70 to 80 million barrels of crude to the markets, Goldman Sachs analysts said.
However, ANZ said the release of 70 million barrels of oil reserves could push the market into a surplus. The bank expects OPEC + to put on hold a planned supply increase in January that could shield markets from headwinds in demand and support Brent at $ 80 a barrel.
The US Department of Energy has launched an auction to sell 32 million barrels of SPR for delivery between late December and April 2022. It plans to release an additional 18 million barrels soon.
Traders are also looking at whether China will implement its plans to pull oil from its reserves.
Analysts said Wednesday that US Energy Information Administration data showed gasoline and distillate inventories fell more than expected even as crude inventories rose, suggesting the market needed more crude.
“But the big picture is that demand for products remains healthy, adding pressure to a tightening market,” Capital Economics economist Kieran Tompkins said in a note.