May 20, 2022

Oil climbs after touching six-week lows as China eyes reserves, Oil and Gas News

Investors are on the edge of their seats to see how much crude will leave the major economies out of their reserves.

Oil prices rose slightly on Thursday after falling to a six-week low as investors wondered how much crude would free the major economies from their strategic reserves and ease the pressure on global crude demand.

At the start of the session, prices fell to a six-week low as China said it was about to tap reserves. On Wednesday, Reuters News reported that the United States was asking large consumer countries to consider stockpiling releases for lower prices.

Washington’s bid to cool the market has prompted China to join a concerted move for the first time, citing high petrol prices and other inflationary pressures.

Phil Flynn, a senior analyst at Price Futures Group in Chicago, said: “Japan and South Korea have shown resilience in disclosing reserves, so we are coming back somewhat.” “The market is going to be constantly nervous because it is wary of a release.”

Global benchmark Brent crude rose 96 cents, or 1.2 percent, to settle at .2 81.24 a barrel. The session low was $ 79.28, the lowest since October 7. US West Texas Intermediate crude futures are up 65 cents, or 0.8 percent, at 79 79.01 a barrel. It fell to an all-time low of 77 77.08 during the session.

A release, even if only from the United States and China, would probably lower prices at least temporarily.

In October, prices hit a seven-year high as the market focused on a rapid return to demand as more people took the COVID-19 vaccine and the lockdown was lifted.

Prices have risen as demand has increased and the Organization of Petroleum Exporting Countries and its partner OPEC + have decided to gradually increase output.

The International Atomic Energy Agency and OPEC have said more supplies will be available next month, but Washington has pushed for a faster pace.

The proposed release of the reserve represents an unprecedented challenge for OPEC, as it involves top importer China.

China’s State Reserve Bureau said it was working on disclosing unclaimed reserves, although it declined to comment on the US request.

An official at Japan’s industry ministry said the United States had asked Tokyo to cooperate in tackling high oil prices, but that Japan could not use the reserve release to reduce prices under the law.

A South Korean official said the country was reviewing US requests to release some of Seoul’s oil reserves, but added that it could only release crude oil in the event of a supply imbalance.

Leave a Reply

Your email address will not be published.