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Crude Oil Prices Rally on Easing Concerns Over US Release of Strategic Reserves

  • 10 November, 2021
  • 12:54 pm EET

Crude oil saw gains after concerns over a potential release from the US strategic petroleum reserve dissipated, with the US Energy Information Administration forecasting that the market will become oversupplied early next year, Australia’s ANZ Bank said in a Wednesday note.

The Biden administration had raised the possibility of tapping the strategic reserve to curb rising gasoline prices, but the EIA’s outlook for the oil market showed that prices are set to fall due to supply increases from OPEC and US shale producers, the bank noted.

However, demand is expected to rise further, with Vitol Group CEO Russell Hardy saying demand has recovered above pre-pandemic levels and the market is seen to be tight for the next 12 months, according to ANZ Bank.

In Europe, prices dropped sharply overnight, with Dutch futures falling as much as 10%, on signs of increased Russian gas flows into the continent, the bank said. Reports said that Gazprom had booked extra transit capacity at the Ukrainian-Slovakian border point pipeline and gas has resumed flowing westward from Poland to Germany, ANZ Bank noted.

Additional gas is needed more than ever amid a weather outlook of below-average temperatures in the coming week, the bank said. This weighed on the North Asian LNG market as prices edged lower, but production outages in Malaysia and Indonesia capped the losses, according to ANZ Bank.

MT Newswire

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