Leads：Oil prices were mixed On Nov. 25 as key consumers rushed to cool the market by releasing crude from their stockpiles, but data showed solid U.S. fuel demand. Investors are waiting to see how major oil producers will respond. The head of the International Energy Agency, Birol, said the oil market was suffering from an artificial supply gap.
Oil prices were mixed on Thursday as major consumer nations rushed to cool the market with an emergency release of crude from their stockpiles, but data showed solid US fuel demand. Investors are waiting to see how major oil producers will respond.
NYMEX crude futures fell 0.09% to 78.32 DOLLARS per barrel at 16:33 Beijing time. ICE Brent crude futures rose 0.11% to $81.13 a barrel.
"The release of oil from strategic reserves intensifies the competition among the world's largest producers for control of the oil market," analysts at ANZ said in a report. "We do not expect OPEC to sit on the sidelines as the market enters a critical period."
High oil prices add to inflation fears. The US Department of Energy has launched an auction that will provide about 32m barrels in exchange, with deliveries scheduled between late December and April 2022. The oil company that receives the crude must return it later, plus interest. The Department of Energy plans to release an additional 18 million barrels soon.
The head of the International Energy Agency (IEA) said on Wednesday the oil market was suffering from an artificial supply gap and he hoped the Organization of the Petroleum Exporting Countries and its oil-producing Allies (OPEC+) would do more to bring down prices at their upcoming meeting.
OPEC+ has stuck to its policy of increasing production by 400,000 BPD a month since August, ignoring calls from major oil consumers such as the United States to step up production. U.S. crude oil inventories rose last week, but gasoline and distillate stocks fell and refining activity increased on strong overall fuel demand, the U.S. Energy Information Administration said Wednesday.
All eyes are now on the Organization of Petroleum Exporting Countries and its partners (OPEC+), which will meet next week to discuss the outlook for the oil industry and unveil a new industrial policy. OPEC+ is not currently discussing a pause in production despite the decision of the United States, Japan, India and other countries to release their crude oil reserves, OPEC+ sources said.
"The bold move by crude importers opens the door for OPEC+ to adjust its supply policy downward at its next (meeting) on December 2, 2021," Louise Dickson, an analyst at Rystad Energy, said in emailed comments.
The United Arab Emirates is fully cooperating with the OPEC+ agreement and has no "preset position" ahead of the upcoming meeting on December 2, state news agency WAM said on Thursday, citing the energy ministry.
Bob Yawger, director of energy futures at Mizuho Securities, said the current release is unlikely to have a big impact on the market because most U.S. releases are arranged to be lent rather than sold outright, and the amounts released by its international partners are modest.
But anz said the release of oil reserves could lead to a surplus in the market. Anz expects OPEC+ to suspend supply increases from January, which could cushion the weak impact of market demand headwinds and support Brent at $80 a barrel.
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