The US release Oil Stockpile to curb the rise in crude oil prices, other major consumers follow suit

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The United States announced on the 23rd that it will release a part of its oil stockpiling to the market as the crude oil prices are soaring. It is said to be a collaborative effort with other major oil consumers, the United Kingdom, China, Japan, India and South Korea, with the aim of increasing supply and curbing oil price increases.

The Chinese government has already announced in September that it will release crude oil from its national stockpiles for the first time, after which it has bid on approximately 7.38 million barrels. 

Following the US, the Japanese government also decided to release the surplus of the national petroleum stockpiling to the market. This is Japans first release from the national stockpile. Japan has approximately 140 days stockpile in the country. After the first release for a few days, Japan will consider releasing more.

The British government announced that it will allow private companies to voluntarily release oil reserves up to 1.5 million barrels.

5 million barrels were released by India which is the amount consumed in a day in India.

The United States will also release a total of 50 million barrels in the coming months. 

OPEC may keep crude prices high

Regarding the crude oil prices, there is a view that prices will continue to remain high as the OPEC (Organization of Petroleum Exporting Countries) led by Saudi Arabia and major oil-producing countries such as Russia have not increased production. 

In the United States, gasoline prices have risen to the highest level in seven years, leading to record price increases, and the approval rating has fallen to the lowest level since taking office. It seems that the aim is to appeal to the attitude of suppressing the impact on the lives of the people.

On the other hand, some market participants have said that even if the release of stockpiles suppresses crude oil prices, the effect will not last long, and it seems that the response of oil-producing countries will be the focus in the future.

New York Crude Oil Market Rise

Regarding the announcement by the U.S. government that it will release oil reserves in cooperation with Japan and others, the New York crude oil market on the 23rd had the perception that the amount released by the United States was within the expected range, and international crude oil Future prices have risen.

The WTI futures price, which is an international indicator of crude oil prices, has risen after the New York crude oil market announced on the 23rd that the White House in the United States will release oil stockpiles.

The futures price, which was in the $ 75 range per barrel before the announcement, has become a deal centred on the $ 78 range.

WTI futures prices rose to the low $ 85 level per barrel, the highest in seven years on the 25th of last month, after which it was reported that the United States and others are considering releasing stockpiles. 

As per the market, the announcement that the United States will release a total of 50 million barrels in the next few months was perceived as within expectations for the time being. There is also a view that it will not last long, and the future response of each country, including the reaction of oil-producing countries, will be the focus. 

National oil consumption 

According to the summary of the major British oil company “BP”, the amount of oil consumed in the world last year (2020) was 88.47 million barrels per day.

By country, the United States has the largest number at 17.17 million barrels, accounting for nearly 20% of the total, followed by China at 14.22 million barrels and India at 4.66 million barrels. Japan was the 5th with 3.26 million barrels, and South Korea was the 7th with 2.56 million barrels.

Last year’s consumption fell sharply from the previous year in many countries due to the spread of the new coronavirus infection, but the release of this stockpile is limited.

For example, the release amount of 50 million barrels launched by the United States is calculated to be consumed in about three days in the United States.

Frontier India News Network
Frontier India News Networkhttps://frontierindia.com/
Frontier India News Network is the in-house news collection and distribution agency.

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