Crude oil futures rallied after the Biden administration announced on November 23 that it would spin off 50 million barrels of oil from the national strategic oil reserve, enough for about 3 days of demand.
Oil stocks today rallied broadly after an initial loss. West Texas Intermediate crude for January delivery (CL00, CLF22), the US benchmark, jumped $ 1.75, or 2.5 percent, to $ 78.50 a barrel. The world benchmark Brent crude (BRN00, BRNF22) gained $ 2.61, or 3.3 percent, to $ 82.31 a barrel.
“The market is concerned about the unsuccessful nature of the US exchange program, the low number of participants and the lack of commitment from China,” said Robert Jauger, executive director of energy futures at Mizuho Securities, in a Marketwatch note. …
President Joe Biden told reporters at a White House briefing that “it will take time, but soon you should see the price of gas drop where you fill your tank,” while the president added that the consequences will not happen “overnight.” …
The White House said the move was coordinated with China, India, Japan, South Korea and the UK, which the administration said are also freeing up reserves. Biden and the head of the Chinese communist regime, Xi Jinping, allegedly discussed the plan in their recent telephone conversation.
Prior to this executive order, the Biden administration had repeatedly called on OPEC + producers and their allies to increase global oil production, but they were rejected. OPEC + said it will stick to its plan and continue to slowly increase production in monthly increments of 400,000 barrels per day.
OPEC members may revise their existing plans to gradually increase production in the event of a coordinated release of reserves from US strategic reserves, Bloomberg reported. OPEC + is set to meet again on December 2nd.
Republican Senator John Barrasso of Wyoming responded to an initial White House statement by saying, “President Biden’s policies are increasing inflation and energy prices for the American people. Using a strategic oil reserve will not solve the problem, we are seeing higher prices because the administration and Democrats in Congress are waging a war on American energy. ”
This came after Biden saw his lowest approval ratings amid accusations from voters over rising inflation, national COVID requirements and high energy prices. The administration’s efforts to minimize drilling, close pipelines, and support renewable energies have played a role in curtailing U.S. oil production.
Reuters and The Associated Press contributed to this report.