Oil prices turned lower during trading on Wednesday, while awaiting the release of official data on oil inventories in the United States.
Crude prices had risen earlier in the trading, with the failure of the United States and a number of other countries’ move to release tens of millions of barrels of oil from reserves to calm the markets.
Oil Prices Today
Brent crude futures prices – for January 2022 delivery – decreased by 0.1%, recording $82.11 a barrel.
The prices of West Texas Intermediate crude futures – January delivery – also fell 0.1%, recording $78.41 a barrel.
The performance of oil comes in conjunction with the rise in the price of the US dollar to its highest level in 16 months.
Strategic Oil Reserves
Crude prices rose in early trading, continuing the gains of the previous session, as investors saw that the volume of issuance of strategic oil reserves by many major oil consuming economies is insufficient to compensate for the current shortage of oil that the world is facing.
“Markets saw the overall release of strategic oil reserves as too small to alleviate the supply-demand imbalance,” said IG market analyst Yip Jun Rong.
The United States will release 50 million barrels of SPR, including 32 million barrels through exchange, to be returned by companies over the next 3 years, while India will release 5 million barrels, and Britain will allow companies to voluntarily release 1.5 million barrels.
South Korea said it would release its crude oil reserves, although it did not specify the timing and size of the release.
A source in the Ministry of Energy in South Korea explained that the country may release about 4% of its strategic oil reserves, equivalent to about 3.8 million barrels, as it did in 2011, during the Libyan crisis.
The announced numbers will do little to pacify prices on rising energy costs and the associated rising inflation. Despite the declines in the past four weeks, crude oil prices are still not far from the 7-year highs touched in late October.
In the US, drivers face the highest Thanksgiving gasoline prices in nine years, starting on November 23.
“The slump with oil prices is officially over, because this oil market deficit is not going away any time soon,” said Edward Moya, chief market analyst , “The US may need to consider another SPR release, but even if they talk about it.” Energy traders know that OPEC+ controls this market.”
Media reports indicate that the American Petroleum Institute reported an increase in US crude oil and gasoline inventories for the week ending November 19, as Crude Oil Inventories rose by 2.3 million barrels in the week, and Gasoline inventories rose by 600,000 barrels.
Reports said that distillate stocks bucked the trend, declining by 1.5 million barrels.
The US Energy Information Administration is scheduled to release official oil stockpile figures later in the day.
SOURCE : REUTERS