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This is how oil prices react to the emergency release by the USA and other countries

On Wednesday, oil prices gave up a small part of their significant mark-ups from the previous day.

The bottom line is that the release of national emergency reserves in numerous countries does not yet have the desired effect. At noon, a barrel (159 liters) of North Sea Brent cost 81.91 US dollars. That was 40 cents less than the day before. The price of a barrel of American West Texas Intermediate (WTI) dropped 32 cents to $ 78.18.

The day before, in a coordinated action with other major economies, the USA announced that it would use its national oil reserves. China, India, Japan, South Korea and Great Britain want to participate in the approval. The background to this is the high crude oil prices, which reached multi-year highs in October and threaten to stifle the economic recovery from the Corona slump.

Market observers attribute several reasons to the fact that oil prices have tended to rise rather than fall since it was released. On the one hand, there has been speculation about a release for weeks and priced in on the markets in the form of falling oil prices. On the other hand, some market participants were disappointed with the oil volumes to be released and the fact that part of this volume will later be put back into the reserve.

It is uncertain how the OPEC + oil network will react to the step taken by the consuming countries. In the coming week, the 23 producing countries want to consult. The oil alliance, led by Saudi Arabia and Russia, has been expanding its production since the summer, albeit only gradually and at a moderate pace. This initially provoked criticism from the consuming countries and then the release of reserves.

As a reaction to the clearance, OPEC + could suspend its planned production increases for two and a half months without there being a shortage on the oil market, explained commodity expert Carsten Fritsch from Commerzbank. “It remains to be seen, however, whether the US will even bring the entire amount onto the market.” Because the oil offered must first be accepted by the private oil companies. “If there is no acute supply bottleneck, the companies addressed will hardly make use of this option without an additional incentive.”

SINGAPORE (dpa-AFX)

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Reference-www.finanzen.at

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