Oil prices are bullish in the Asian session today, as the worry of a potential coordinated release of crude reserves by the world’s major economies in a bid to lower prices, seems to be wearing off and having less of an impact on the black liquid’s price.
The global benchmark, Brent crude oil is up 0.87%, currently trading at $81.95 a barrel, after falling to a six-week low on Thursday.
The United States benchmark, the West Texas Intermediate (WTI) crude is up 0.85%, currently trading at $79.10 a barrel, as of the time of writing this report.
What you should know
The market volatility witnessed on Thursday is a result of a Reuters report that the United States had asked China, Japan and other big buyers to join a release of crude stocks from Strategic Petroleum Reserves (SPR).
According to Reuters, U.S. President Joe Biden has been facing growing calls to release supply from the SPR to curb soaring gasoline prices.
The U.S. push for a coordinated release of oil stockpiles has been seen as a signal to the Organization of the Petroleum Exporting Countries and its allies (OPEC+), to raise output to address concerns of high fuel prices in the world’s biggest economies, starting with the United States, China and Japan.
The global benchmark has appreciated approximately 60% this year, recently driven by a wider energy crunch as economies recover from the COVID-19 pandemic at the same time the OPEC+ has only gradually raised output.
The OPEC+ has maintained what analysts say is unprecedented restraint on production, even as prices have rebounded from the depths of the early stages of the coronavirus pandemic.
Fitch Solutions commodities analysts said in a note: “However, the market remains fundamentally tight and any volumes released are unlikely to substantially alter the global balance. As such, we expect any downside to prices to be limited in both scale and duration.”
Data from Saudi Arabia reveals that its oil exports hit an eight-month high in September, rising for a straight fifth month.