Oil falls as the US decides to sell oil from its strategic reserves

Highlights

  • Crude oil prices dipped on Thursday.
  • The US is considering options to sell out oil from its strategic reserves.
  • Crude oil prices have been weighted by a higher-than-expected crude oil inventory in the last week.

Crude oil prices dipped on Thursday as the US is considering options to sell out oil from its strategic reserves to cool down oil prices. Additionally, Russia also made commitments to stabilise the natural gas market. December delivery Brent Crude oil futures last traded at US$82.43 per barrel up 0.02%, whereas November delivery WTI crude oil futures traded 0.75% up at US$78.89 per barrel as of 08 October 2021 at 11:47 AM AEDT.

Jennifer Granholm, the US Energy Secretary stated on Wednesday that the country’s administration is considering options to tap the US strategic reserves to cool skyrocketing gasoline prices.

Higher-than-expected crude oil inventories in the US

Crude oil prices have been weighted by a higher-than-expected crude oil inventory in the last week. As per the US Energy Information Administration, the US stocks rose dramatically by 2.3 million barrels against the expectations for a dip of 418,000 barrels.

Russia on the other hand was boosting gas supplies to Europe in response to the energy crunch and stabilise the market amid skyrocketing gas prices.

OPEC

OPEC | Source: © Gumpapa | Megapixl.com

The prices of both the oil benchmarks surged to record high levels after the Organisation of the Petroleum Exporting Countries (OPEC) along with its allies decided to stick to their original plan of increasing the output gradually, as planned in July 2021. The cartel agreed to ramp up the production by 400,000bpd per month till April 2022 to phase out the existing 5.8 million bpd production cut.

Bottom Line

Crude oil prices tumbled on Thursday as the US decided to sell out oil from its strategic reserves, a move to cool down skyrocketing oil and gas prices.

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