US to issue emergency oil reserves in response to higher prices

U.S.A.US to issue emergency oil reserves in response to...

FILE PHOTO: A maze of crude oil pipes and valves is photographed during a Department of Energy visit to the Strategic Petroleum Reserve in Freeport, Texas, United States June 9, 2016. Reuters / Richard Carson / FILE PHOTO

Nov 23 (Reuters) – The United States is expected to announce the release of crude from its emergency reserves on Tuesday in the form of a loan as part of a plan drawn up with Asia’s major energy consumers to cut oil prices. are supposed to. To a US government source familiar with the situation.

The measure is intended to control the rise in energy prices after OPEC producers and their group of allies, known as OPEC+, are trying to pump crude more quickly to meet rising demand. Repeated requests from Washington and other consuming countries for the same were rejected.

US President Joe Biden is facing a low approval rating due to high prices of gasoline and other consumer goods amid the recovery from the coronavirus pandemic, threatening him and his Democratic Party ahead of next year’s US congressional elections Is.

A “swap” of the US Strategic Petroleum Reserve (SPR) will be announced on Tuesday in a coordinated move with several countries, said the source, who did not specify the amount of oil to be released from the US. Booking.

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Biden has already asked China, India, South Korea and Japan to release their strategic oil reserves with the US. Japanese and Indian officials are working on how to do this, Reuters reported.

Washington’s unprecedented effort to partner with major Asian economies to reduce energy prices is aimed at warning major producers to pump more oil to address concerns about higher fuel prices in the most powerful economies. .

OPEC+, which brings together the Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia, is due to meet on December 2 to discuss its production strategy.

The impact of a coordinated oil release will depend on timing and volume, but a release of more than about 60 million barrels in about 30 days would be viewed by the market as “very negative for prices“, according to analyst Vivek Dhar. Commonwealth Bank of Australia.

“This situation comes at a time when this market was changing and world oil reserves were rising. So it could lead to a further drop in prices,” he said, pointing to the new sanctions against the coronavirus in Europe.

(Information from Valerie Volcovici and Timothy Gardner; Additional information from Sonali Paul in Melbourne; Writing by Richard Waldmanis; Editing by Richard Pullin; Translated by Jose Muoz in Gdask writings)

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