Crude oil dips on the back of US-led emergency oil release

Highlights

  • Crude oil prices dipped on Thursday.
  • OPEC believes that the US release is expected to increase the surplus by 1.1 million bpd.
  • Oil watchers are now eagerly waiting for the meeting of OPEC and its allies, scheduled on 1-2 December.

Crude oil prices dipped on Thursday as OPEC anticipates that the US-led emergency oil release, designed to reduce crude oil prices will increase the crude inventories in the country. A similar trend in the prices was witnessed on Friday too. January delivery Brent Crude oil futures last traded at US$81.27 per barrel down 1.19%, whereas January delivery WTI crude oil futures traded 1.66% down at US$77.09 per barrel as of 26 November 2021 at 12:19 PM AEDT.

Rising US stocks

OPEC believes that the US release is expected to increase the surplus by 1.1 million bpd in the market.

US President, Joe Biden earlier urged OPEC and its allies, together known as OPEC+ to increase the output to cool down oil prices. However, the cartel doesn’t react to this seriously. As a result of which, the US along with other leading oil consumers of the world decided to release oil from their strategic reserves to increase the supply to slash the skyrocketing crude oil prices.

OPEC+ has been adding 400,000 bpd of supply since August to phase out the existing production cuts, made last year during pandemics.

Crude oil stocks

Crude oil stocks | Source: © Batareykin | Megapixl.com

Oil watchers are now eying on the OPEC’s stand on this and eagerly waiting for the meeting of OPEC and its allies, scheduled on 1-2 December to set oil policy for the coming months.

Bottom Line

Crude oil prices surged magnificently in the current year as economies across the globe made a solid recovery from the lows of pandemics. The most recent drops in crude oil prices are underpinned by the US led emergency oil release, an initiative to cool down oil prices.

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