China’s zero-COVID ambitions are weighing…
Oil prices were up early…
It is the prerogative of the U.S. Administration whether to draw crude oil from its Strategic Petroleum Reserve (SPR), Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, said on Monday, as carried by Reuters.
U.S. President Joe Biden said at the end of November that the Department of Energy would release 50 million barrels of oil from the SPR in a bid to lower high gasoline prices in a coordinated effort with other major oil-consuming nations. The SPR release from the United States will be carried out in parallel with other major energy-consuming nations, including China, India, Japan, South Korea, and the UK, the White House said at the time.
The SPR release was largely priced in by oil market participants and hasn’t contributed to lowering gasoline prices significantly in America, which hit a seven-year high in the autumn.
The move by the U.S. and other major oil consumers has not materially lowered international crude oil prices, which is the largest component of gasoline pricing in the United States.
At the end of December, the U.S. Department of Energy approved a third exchange of two million barrels of crude oil for release to ExxonMobil from the SPR as part of the Biden Administration’s efforts to boost fuel availability and lower gasoline prices.
So far, the U.S. DOE, as authorized by President Biden, has provided more than seven million barrels of SPR crude oil to companies, including two previous exchanges awarded earlier in December.
At the end of 2021, Japan and South Korea also said they would soon offer oil from their strategic reserves. Japan said it planned to auction in February 629,000 barrels of crude oil from its national reserves, while South Korea plans to release 3.17 million barrels of its oil reserves in the first quarter of 2022.
China has reportedly agreed with the United States to release crude from its strategic reserves around the Lunar New Year holiday on February 1, as part of the broader U.S.-led effort for strategic releases to bring oil prices down, sources with knowledge of the talks told Reuters last week. The news out of China failed to lower oil prices at the end of last week.
By Charles Kennedy for Oilprice.com
More Top Reads From Oilprice.com:
Charles is a writer for Oilprice.com