Japanese and Indian officials are working to find ways to sell national crude oil reserves along with the US and other major economies to cut prices, seven government sources familiar with the plans told Reuters.
Such an announcement can be made even today, according to a source who has become aware of the discussions.
The White House and US Department of Energy officials said no formal decision had been made to release the stock.
US President Joe Biden has called on China, India, South Korea and Japan to coordinate oil supplies as gasoline prices rise in the United States and popularity drops in the run-up to the midterm elections. Congress, to be held next year.
The US government has failed to push OPEC + to increase oil production, with countries producing large amounts of oil arguing that there is no shortage of oil worldwide.
OPEC and other oil-producing countries, including Russia, which make up OPEC +, have increased production by about 400,000 barrels a day on a monthly basis, but are resisting Biden’s call for more drastic increases, arguing that demand recovery will be fragile.
The threat of a coordinated supply of state oil reserves, coupled with the imposition of new coronavirus-related lockdowns in Europe, have halted the race for oil prices. The price of Brent oil is hovering around $ 79.30 a barrel, down more than seven dollars from the highest price level recorded at the end of October.
The exact amount of oil that will be marketed in combination with the above countries has not been clarified, but Citigroup analysts estimated on Friday that it could be in the range of 100 to 120 million barrels or more. The US may have 45 up to 60 million barrels from their reserves, according to Citi.
Such a move could force OPEC + to reassess whether it can continue the current pattern of steady increases in market volumes, said Joseph Macmonigl, Secretary-General of the International Energy Forum (IEF), based in Riyadh. of Saudi Arabia.
“If they make a change, they will do so due to unforeseen external factors, such as lockdowns in Europe, any strategic stockpile and fluctuations in demand for jet fuel,” he added. The IEF is the largest international body of energy ministers, including Saudi Arabia, the United States, and Russia.
Rising COVID cases in Europe support recent statements by officials, such as OPEC Secretary-General Mohamed Barkido, who has said the market will soon have a surplus. In this case, OPEC members who have more room to increase their production may prefer and maintain production at current levels or even reduce it.
“The release of government stocks could easily boomerang,” said Troy Vincent, a market analyst at DTN.
Japanese Prime Minister Fumio Kishida has hinted that he is ready to stockpile over the weekend.
Democrats in the House of Representatives yesterday urged President Biden to release crude oil from the US Strategic Petroleum Reserve (SPR) and impose a temporary ban on oil exports to help lower energy prices.
SOURCE: AMPE
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