Yesterday evening, the U.S. government officially announced that it would release 50 million barrels of strategic oil reserves to curb the continued rise in oil prices.
The Biden administration said in an official statement that the United States will use the Strategic Petroleum Reserve (SPR) to release 50 million barrels of crude oil from the SPR. Of these, 32 million barrels of oil released will be traded in the coming months, and sales of 18 million barrels of strategic petroleum reserves that Congress has approved will be accelerated. The released strategic petroleum reserves will be replenished in 2022, 2023 and 2024.
In addition, many countries, including India, Japan, South Korea and the United Kingdom, have announced follow-up. India has announced that it will release 5 million barrels of crude oil from its reserves at the same time. The UK will release 1.5 million barrels of oil from reserves; Japan plans to release 4.2 million barrels of oil reserves; South Korea agrees to participate in a joint release of oil reserves.
As soon as the news came out, international oil prices rose instead of falling. In terms of internal trading, as of the close of the night, the main contract of low-sulfur fuel oil rose by more than 3%, and the main contracts of fuel oil and methanol rose by more than 2%.
Yang An, an analyst at Haitong Futures, told reporters that it can be seen from the reaction of oil prices that the impact of the release of strategic oil reserves by the United States and other consumer countries has been fully reflected in the market. The continued decline in oil prices in the early stage is largely related to this. Once this factor comes to fruition and market tensions are released, oil prices will rebound instead of falling. The current factors affecting the crude oil market are still very complex. In addition to releasing strategic crude oil reserves, US President Biden is also prepared to take additional actions on oil prices, including banning crude oil exports, if necessary. In addition, the worsening epidemic situation in parts of Europe and the United States will put pressure on crude oil market demand, and the specific production increase plan of the OPEC meeting next week will also continue to have an impact on oil prices. With so many influencing factors, the oil price trend faces many uncertainties, and the market is prone to recurrence.
Zheng Mengqi, an analyst at Hizheng Futures, believes that oil prices have risen instead of falling mainly because the amount of strategic oil reserves released by the United States is too small and cannot meet the current supply and demand deficit in the global crude oil market. Moreover, these 50 million barrels are released in batches. Currently, the only 18 million barrels that have a greater impact on the market are accelerated sales, and the amount of strategic oil reserves released by the country is even less, which is lower than market expectations. All the bad news has been exhausted, and the oil price Upward.
“As EIA predicted in the early stage, the release of strategic petroleum reserves will cause the oil price to drop by about US$2/barrel, and the impact will be relatively short-lived. We believe that the United States has called on other countries to release strategic petroleum reserves to pressure OPEC+ to increase production, but OPEC+ has so far expressed this No clear statement has been made. The current crude oil market is still in a tight balance between supply and demand. Crude oil and refined oil inventories are at historical lows for the same period. Fundamental support is strong, and the space below oil prices is limited. It should be noted that the current epidemic in Europe has worsened again, and Austria has launched a blockade. Measures, the epidemic situation in Germany is not optimistic, and demand expectations are lower than in the previous period. In addition, since November, the Federal Reserve has reduced its bond purchases, expectations of an early interest rate hike have increased, the U.S. dollar index has strengthened, and commodity prices have come under pressure. Therefore, oil prices are still oscillating Operation is the main thing,” Zheng Mengqi said.
The head of commodity strategy at Saxo Bank also believes that the United States has actually released only 18 million barrels of crude oil, and the rest are only “temporarily lent” and will be repurchased and put into storage later, which will not solve many problems. TD Securities said that the release of strategic oil reserves by the United States and other countries may cause OPEC+ to reconsider its production increase plan. OPEC+’s limited effective idle production capacity and the possibility of not increasing production may cause output to be lower than market expectations, thus giving a negative impact on 2022. Oil markets pose upside risks.
At 3 a.m. Beijing time today, U.S. President Biden delivered a speech on economic and price issues. Biden said that the economy still faces challenges, and the challenges of the epidemic have led to rising prices, and action will be taken on problems in the economy. High oil prices are a problem around the world, and oil-producing countries are not increasing supply fast enough, so action will be taken on gasoline prices. “Coordinated global action on oil reserves will help address the supply shortfall. Action will not solve the problem overnight, but it will have an impact. The release of the Strategic Petroleum Reserve (SPR) will provide the supply of crude oil we need. , we will get through this peak in gas prices, hopefully sooner than in the past.
Later, U.S. Energy Secretary Granholm and White House Press Secretary Jen Psaki were interviewed. Granholm said that U.S. President Biden’s actions will cause oil prices to drop by 10%, and that President Biden has other means to reduce energy costs. Jen Psaki said she would not rule out further releases of strategic oil reserves.
As of this morning’s close, WTI January crude oil futures closed up 2.28% at $78.50/barrel, the highest closing level in the past three trading days; Brent January crude oil futures closed up 3.27% at $82.31/barrel, a record high A new closing high since November 16. NYMEX December gasoline futures closed up 3.4% at $2.3372/gallon, rising for two consecutive days.</p
