The price of oil is slightly higher at the beginning of the week with Brent currently worth 79.12 dollars a barrel (+ 0.29%) and Wti 76.17 (+ 0.30%) remaining at the lowest since the beginning of October after having closed the week with a loss ranging from -4% of Brent to -6% of WTI. The jolt came from the States after the American president, Joe Biden, decided to knock on the door of some oil-producing countries asking them to consider the possibility of putting part of their crude reserves on the market, as part of an effort coordinated to lower prices and stimulate economic recovery.
The proposal, according to some sources, would have been collected primarily from Japan. Japanese Prime Minister Fumio Kishida signaled on Saturday that he was ready to help counter the surge in oil prices following the US demand, thus initiating an unprecedented move. The secretary and head of cabinet, Hirokazu Matsuno, however, reiterated today that no effective decision has been taken.
To do this, the Land of the Rising Sun must devise a way to circumvent the law that allows the release of oil reserves only in the event of a shortage of supplies or natural disasters. For its part, the White House has again urged the Opec + producer group to maintain an adequate global offer.
The combined release of strategic reserves (Spr) could be between 100 and 120 million barrels or even more, Citi analysts said. The estimate includes 45 to 60 million barrels made available by the United States, about another 30 million barrels from China, 5 million barrels from India and 10 million barrels each from Japan and South Korea. should decide to proceed, it would be unique in its history, given that it has never released stocks from state reserves, unlike others who have already done so during the 1991 Gulf War and following the earthquake of 2011 and the tsunamis.
Meanwhile, investors are adjusting the game, probably licking their wounds from the latest hasty purchases. Some fund managers, according to the US Commodity Futures Trading Commission, cut their net long positions on US WTI crude oil futures and options over the past week.
“The threat of a coordinated release of strategic reserves from various economies is more noise than substance, with President Biden unable to release a substantial amount of Spr unless the situation can legally be defined as a major supply disruption,” said Jeffrey Halley, Oanda’s market analyst in Asia Pacific.
“Europe is a more sober situation and if Eurozone countries return to adopting tighter closures during the holiday season, the knock-on effects on consumption will be evident. Until the European situation is clarified in one way or another. Otherwise, oil rallies are likely to struggle to register momentum above $ 82 and $ 80, respectively. However, with oil prices now about 10% lower than a few weeks ago, and demand still robust in America. and in Asia, I don’t anticipate another major sell-off from here, ”concluded Halley.
“The underlying picture remains firmly bullish, with prices continuing to gravitate in the area of ​​the highs of the year, but the alarms we launched in the last few comments have materialized with the collapse of the first discriminating thresholds towards 80 and 78 dollars per barrel “, emphasized Websim who for the moment is in the $ 75 area and is closely following the evolution of the scenario. (All rights reserved)

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