SULAIMANI (ESTA) — Oil prices slid to near six-week lows on Thursday as China said it was moving to release reserves following a Reuters report that the United States was asking big crude consumers to consider a coordinated release of stocks to lower prices.
The bid by the U.S. administration to shock markets, asking China to join coordinated action for the first time, comes as inflationary pressures, partly driven by surging energy prices, start to produce a political backlash, as the world fitfully recovers from the worst health crisis in a century.
Brent crude was down 75 cents to $79.53 a barrel by 0849 GMT, after earlier dropping to $79.60, the lowest since Oct. 7.
U.S. crude was down $1.02 at $77.34 a barrel, having fallen earlier to $77.40, also the lowest since early last month.
Prices hit seven-year highs in October as the market focused on the swift rebound in demand that has come with lockdowns being lifted against a slow increase in supply from the Organization of the Petroleum Exporting Countries (OPEC) and its allies, called OPEC+.
“Should the U.S. administration order an SPR (Strategic Petroleum Reserve) release, that could send a strong political sign,” Citigroup analysts said in a note.
“But … domestic refineries are unlikely to get an extra benefit, as light-end yields appear to have been already maxed out,” they added, referring to margins for producing gasoline and other motor fuels.
(Esta Media Network/Reuters)