Friday, December 3

Oil fell to 6-week lows due to expectations of excess supply

In the week ending November 12, crude oil reserves in the United States fell 2.1 million barrels (mb) to 433 mb, when analysts expected a rise of 1.2 mb.

At the same time, as a sign of strength in demand, gasoline reserves fell in line with what analysts expected, some 700,000 barrels.

On their side, strategic oil reserves fell 3.2 mb, a volume similar to that of the previous week. The volume of these stocks stands at about 606.1 mb.

The market is alert to the possibility that the United States uses these reserves in a significant way to cause a drop in prices at gas stations.

“It was a constructive report with stocks declining for all products,” said Andy Lipow of Lipow Oil Associates in Houston, Texas.

But this retreat is double-edged: Markets fear it will push prices higher and further lead Joe Biden’s government to try to free up strategic reserves to cut fuel.

According to reports, the United States is considering announcing an emergency release of crude from its strategic oil reserve, which contains more than 600 million barrels.

On Tuesday, OPEC Secretary General Mohammad Barkindo said the group sees signs of a surplus oil supply starting next month He added that its members and allies will have to be “very, very cautious.”

It should be remembered that the US government faces the growing discontent of the population due to inflation, driven in particular by the increase in energy prices. Prices rose 6.2% at 12 months in October, a high since 1990.

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