Crude Oil Falls as Market Waits for OPEC+ Response to Reserve Statement From

© Reuters.

by Jeffrey Smith – Crude oil prices fell in lower trading on Thursday as the market used the US Thanksgiving holiday to take a break ahead of next week’s major OPEC+ meeting.

By 5:10 AM ET (1010 GMT), futures were down 0.7% to $77.86 a barrel, while the international benchmark was down 0.6% at $81.79 a barrel.

The OPEC + group, which includes the world’s largest exporters, is scheduled to meet within a week, on the second of Decembersecond abbreviationUnder pressure to respond to a coordinated signal from the world’s largest buyers that prices are too high.

Speculation about a joint release of reserves drove prices to a seven-week low before Tuesday’s announcement, and while prices have jumped more than $2 since then, they are still about 8% off their October highs.

So far, the group has not indicated any shift in its production policy, but the Organization of the Petroleum Exporting Countries, which has already warned that the global market will return to surplus early next year, indicated on Thursday that the planned release of strategic reserves. by the United States and others would equate to increasing global supply by about 1 million barrels per day.

OPEC+ has pledged to restore the production it cut at the start of the pandemic in monthly increases of 400,000 barrels per day. In recent months, it has struggled to meet this commitment due to production difficulties in members such as Nigeria and Angola. Some now see this pledge under review.

“The alliance may… choose to reduce future production hikes when they meet,” Ole Hansen, a strategist at Saxo Bank, said in a morning note to clients.

The United States intends to hold regular auctions of barrels from its Strategic Petroleum Reserve between January and April.

“Total inventory release numbers could exceed 60-70 million barrels based on what we know now, which warrants attention to the rate of decline for such a release,” Bjornar Tonhugen, oil market analyst at Rystad Energy, said in comments via email.

There was a modest reaction on Wednesday to weekly data released by the US government showing an increase of 1 million barrels in commercial crude stocks last week, not least due to the continued decline in stocks of gasoline and other fuels, indicating that final demand from airlines, drivers and… Chemical companies are still going strong.

Airlines in particular have increased capacity to deal with pent-up demand on routes across the Atlantic, after lifting restrictions on visitors from the United Kingdom and the European Union, allowing Americans in Europe to fly home to celebrate Thanksgiving for the first time in two years.

Elsewhere, US RBOB gasoline futures were also down 0.7% to $2.3035 a gallon. The US government has acknowledged that retail prices on Thanksgiving will be their highest in nine years.

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