Oil Declined as U.S. Sought Coordinated Release of Reserves from Major Countries
Prices of crude oil decline sharply after reports U.S. seeking cooperation from strategic countries to release reserves in an attempt to cool down oil prices
Oil price came under pressure on Thursday after news broke out in the mainstream media U.S. is in talks with major oil consumer including China and Japan to consider a coordinated release of oil, according to Reuters.
The West Texas Intermediate crude oil is trading at $77.52 down by 1.07% while Brent is trading at $79.85 slipping by 0.54%.
Energy Information Administration (EIA) on Thursday in its weekly reported U.S. crude stock fell unexpectedly for the week ending November 12, 2021.
Crude inventories fell by 2.1 million barrels exceeding market expectations of an increase of 1.49 million barrels. The fall in inventories came even after U.S. released more than 3 million barrels from its strategic reserve for the second consecutive week. This shows the strong demand for crude oil in the market.
Inventories at the Crushing, Oklahoma delivery hub rose by 216,000 barrels which rose first time in several weeks, the EIA report noted.
Gasoline inventories fell by 708,000 barrels while diesel and heating oil fell by 824,000 barrels, according to EIA.
In recent weeks the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC) have said more supply will be available in the market in the next several months. Currently, OPEC+ is maintaining an output boost by 400,000 barrels per day every month.
IEA on Tuesday revised its Brent crude oil price for 2022 to $79.40 a barrel but expects the price rally might east off. The agency also added the average price for Brent this year is expected to be $71.50 a barrel.