Oil prices changed little on Thursday as investors waited to see how the market would respond to the strategic release of crude oil reserves designed by large consumers to cool the market, even as the data points to healthy US fuel demand.
Brent crude futures fell 3 cents to $82.22 a barrel at 0351 GMT after losing 6 cents on Wednesday.
West Texas Intermediate (WTI) crude futures were down 9 cents, or 0.1%, to $78.30 a barrel, after losing 11 cents on Wednesday.
The release of oil from strategic reserves increase competition for control of the oil market among the world’s largest producers.
Now all eyes are on OPEC+, the Organization of the Petroleum Exporting Countries, Russia and its allies, which will meet next week to discuss oil demand and supply. OPEC+ will meet on December 2 to decide whether to increase production by another 400,000 barrels in January.
The bold move by big oil importers is a push for OPEC+ to reconsider its supply policy at its meeting on December 2, 2021.
However, some sources say that OPEC+ will continue to implement its policy despite the US, Japan, India and others’ decision to release their emergency oil stocks. According to them, it is highly unlikely that OPEC+ will take a decision in January to increase supply, protect the markets from demand fluctuations and support Brent at $80 a barrel.
The group OPEC+ is adding 400,000 bpd to supply since August, which loosened record production cuts last year when pandemic restrictions slashed demand.
High oil prices increased inflationary concerns. A coordinated release from the US-led state oil reserves would add to the markets a supply of around 70 to 80 million barrels of crude oil. However, as a support of 70 million barrels in quantity is expected to have a small and short-term effect.
The U.S. Department of Energy has launched an auction to sell 32 million barrels of SPR for delivery between late December and April 2022. Another 18 million barrels planned to be soon.
Traders are also wondering if China will follow its plans to extract oil from its reserves.
Analysts say data from the U.S. Energy Information Administration on Wednesday showed crude stockpiles rose and gasoline and distillate stocks fell more than expected, but showed the market needed more crude.
The main issue that will reassure all market players is that the demand for the product remains healthy and puts the necessary pressure on the market.