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Barrel rises 3% after US resorts to emergency reserves

FILE PHOTO: A hydraulic oil extraction pump in the Permian Basin of Loving County, Texas, United States, November 22, 2019. REUTERS / Angus Mordant

By Scott DiSavino

NEW YORK, Nov 23 (Reuters) – Oil prices rose to a week high on Tuesday after the United States and other consuming countries announced a release of tens of millions of barrels of oil reserves to try to cool the market. .

* The United States said on Tuesday it would release millions of barrels of oil from strategic reserves in coordination with China, India, South Korea, Japan and Britain, to try to cool prices after OPEC + producers ignored requests for more raw.

* However, analysts noted that the effect on prices is likely to be short-lived, following years of declining investment and a strong global recovery from the COVID-19 pandemic.

* Brent futures were up $ 2.61, or 3.3%, to $ 82.31, while US West Texas Intermediate (WTI) crude was up $ 1.75, or 2.3%, to 78 ,50 dollars.

* It was Brent’s biggest daily percentage gain since August and its biggest close since November 16. It also pushed Brent’s premium over WTI to its highest since mid-October.

* Talks for the coordinated release of reserves, the strength of the dollar and the possible impact on energy demand of a fourth wave of COVID-19 cases in Europe have already seen Brent fall more than 10% from a high of three-year $ 86.70 posted on Oct. 25.

* The administration of President Joe Biden said it would release 50 million barrels of the Strategic Petroleum Reserve (SPR) of the United States, which will begin to reach the market in mid to late December.

* “The coordinated release of SPR (reserves) was lower than expected and will undoubtedly be answered by lower production from OPEC +,” said Edward Moya, senior market analyst at OANDA, noting that “no one would be surprised that (OPEC +) reduced its production plans. “

* The OPEC + alliance between the Organization of the Petroleum Exporting Countries and its allies, including Russia, has so far rejected repeated requests from Washington to pump more oil.

* UAE Energy Minister Suhail Al-Mazrouei said on Tuesday that he saw “no logic” in increasing his own contributions to the markets at this time, and that the technical data collected pointed to an oil surplus. in the first quarter of 2022.

(Reporting by Ron Bousso. Reporting by Roslan Khasawneh, Naveen Thukral and Sonali Paul. Edited in Spanish by Marion Giraldo / Janisse Huambachano / Javier Lopez de Lerida)

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