Oil eases, focus on OPEC+ response to U.S.-led oil release

Commodities47 minutes ago (Nov 25, 2021 10:40AM ET)

(C) Reuters. FILE PHOTO: A sticker reads crude oil on the side of a storage tank in the Permian Basin in Mentone, Loving County, Texas, U.S. November 22, 2019. Picture taken November 22, 2019. REUTERS/Angus Mordant

By Ahmad Ghaddar

LONDON (Reuters) -Oil prices fell slightly on Thursday, as investors eyed how major producers respond to the U.S.-led emergency oil release designed to cool the market and with OPEC now expecting the release to swell inventories.

Brent crude futures slipped 14 cents, or 0.2%, to $82.11 a barrel by 1413 GMT. U.S. West Texas Intermediate (WTI) crude futures fell 30 cents, or 0.4%, to $78.09 a barrel.

OPEC expects the U.S. release to swell a surplus in oil markets by 1.1 million barrels per day (bpd), a source from the group said.

The Organization of the Petroleum Exporting Countries, Russia and allies, together called OPEC+, will meet on Dec. 1-2 to set policy.

“The bold move from the oil importers has opened the door wide open for OPEC+ to adjust its supply policy downwards at its next (meeting on) 2 December 2021,” Rystad Energy analyst Louise Dickson said.

OPEC+ has been adding 400,000 barrels per day of supply since August, unwinding record output cuts made last year when pandemic curbs slammed demand.

Three sources told Reuters OPEC+ is not discussing pausing its oil output increases, despite the decision by the United States, Japan, India and others to release emergency oil stocks.

OPEC members the United Arab Emirates and Kuwait said they were fully committed to the OPEC+ agreement and had no prior stance ahead of next week’s meeting.

Iraq, also an OPEC member, said it backs continuing OPEC+’s existing plan of raising output by 400,000 bpd a month, saying the outlook for the oil market was unclear due to turbulence in global markets.

High oil prices have added to inflationary concerns. A coordinated release could add around 70-80 million barrels of crude supply to markets, analysts at Goldman Sachs (NYSE:GS) said.

The U.S. Department of Energy has launched an auction to sell 32 million barrels of strategic petroleum reserves (SPR) for delivery between late December to April 2022. It plans to release another 18 million barrels soon.

Traders are also looking out for whether China will follow through on plans to release oil from its reserves.

U.S. Energy Information Administration data on Wednesday showed gasoline and distillate stockpiles fell more than expected, while crude stocks rose. [EIA/S]

(Additonal reporting by Sonali Paul in Melbourne and Florence Tan in Singapore; Editing by Kirsten Donovan and Bernadette Baum)

Oil eases, focus on OPEC+ response to U.S.-led oil release

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

About the author

Related