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Oil prices rise 1% on reports Opec + may reassess production

Bouncing off recent losses, oil prices rose on Monday following reports that OPEC + could adjust its plans to increase oil production if major consuming countries release crude from their reserves or if the coronavirus pandemic slows down Requirement.

Brent crude futures rose 1% to $ 79.70 per barrel, while WTI crude futures rose 1% to $ 76.75 per barrel. barrel.

Benchmark Brent and US West Texas Intermediate (WTI) crude prices fell more than $ 1 early in the session, reaching their lowest levels since October 1.

Japanese and Indian officials are working on ways to free up national crude oil reserves in tandem with the United States and other major economies to cushion prices, according to a Reuters report.

Such an announcement could come as early as Tuesday, the report said, citing a source. However, officials from the White House and the US Department of Energy said no official decision on release had been made.

The talks came after the U.S. government was unable to persuade the Organization of the Petroleum Exporting Countries and its allies, including Russia, known as OPEC +, to pump more oil with the major producers claiming there is no shortage of crude oil.

OPEC + agreed this month to stick to plans to increase oil production by 400,000 barrels per day (bpd) from December.

Oil prices rose after Bloomberg News reported that OPEC + may change its plans to continue ramping up production, citing delegates.

“OPEC is sending a signal that if these players do that, they have barrels they can hold back and will offset the impact of an exit,” said Phil Flynn, senior analyst at Price Futures in Chicago.

Joseph McMonigle, secretary general of the Riyadh-based International Energy Forum, said on Monday that he expects OPEC + to maintain its phased market supply plan, according to the Reuters report.

“I see them sticking to their current plan in light of the oversupply for next year, which is typical of oil markets in the first quarter,” he said. “If they are going to make a change, it will be because of unforeseen external factors, such as these bottlenecks in Europe, any kind of strategic release and changes in the demand for jet fuel.”

Any publication from SPR would only affect prices for two or three weeks, said Fereidun Fesharaki, chairman of consultancy Facts Global Energy.

The combined release of SPR could be 100 to 120 million barrels or even more, Citi analysts said in a note dated Nov. 19. That includes 45-60 million barrels from the United States, about 30 million barrels from China, 5 million barrels. India and 10 million barrels each from Japan and South Korea, the bank estimated.

Concerns about demand were fueled by the prospect of national lockdowns in Europe, which put pressure on prices.

Austria entered its fourth national lockdown on Monday as Europe once again becomes the epicenter of the coronavirus pandemic. Germany could also impose new restrictions, with politicians debating a lockdown for unvaccinated people.

With contributions from the agency

First publication: STI


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