While the investors were waiting on the emergency release of reversed oil on Thursday, the oil prices were little changed. The release of emergency crude was intended to temper the market, despite data showing strong gasoline demand in the United States.
At 0315 GMT, Brent oil futures were down 3 cents to $82.22 a barrel after losing 6 cents the day before. WTI oil futures in the United States slid 9 cents, or 0.1%, to $78.30 a barrel. It extended a loss of 11 cents on Wednesday.
OPEC+ decision will be market changing
The Organization of the Petroleum Exporting Countries, Russia, and its allies are OPEC+. This organization is holding a meeting next week to discuss oil demand and supply. Since August, the company has been increasing supply by 400,000 barrels per day, reversing record output cutbacks taken earlier as influenza bans hit demand. On December 2, OPEC+ will meet to determine whether to increase output by another 400,000 BPD in January.
Despite the decision by the US, Japan, India, and others to release emergency oil supplies, OPEC+ is not considering stopping its oil output hikes.
High oil costs have exacerbated inflationary fears. According to analysts, a coordinated release of state oil reserves will be driven mostly by the United States. This release has the potential of adding 70 million to 80 million barrels of crude to the market. The release of 70 million barrels of oil reserves, according to ANZ, might drive the market into oversupply. The bank expects OPEC+ to postpone a planned supply increase in January, which would help to cushion markets from demand headwinds and keep Brent near $80 a barrel.
The USA and the UAE release oil reverses
According to statements released, the United Arab Emirates expressed its complete commitment to the OPEC+ deal mentions that it has no “prior stance” ahead of the upcoming meeting. “The energy ministry emphasizes on the UAE commitment to the cooperation with OPEC+ and the agreement. They also added that this country has no previous stance or bias on the next meeting. The ministry stated, “The OPEC+ group will make any decisions collectively at its next Ministerial meeting.”.
The US Department of Energy has begun an auction to sell 32 million barrels of SPR, with delivery dates ranging from late December to April 2022. It intends to discharge another 18 million barrels shortly. Traders are also watching to see if China would carry out its intentions to release oil from its stockpiles.