Joint action

Oil price rises in defiance of US move to release reserves

Petrol station

Soaring oil prices are being felt at the pumps

Oil prices rose overnight despite international moves led by the US to pump more reserves into the market.

The United States is releasing 50 million barrels from its strategic oil reserves as part of a coordinated international move aimed at bringing down energy prices.

Britain, China, India, Japan and South Korea will also increase capacity in a move that follows repeated requests by US President Joe Biden to persuade the Opec group of oil-producing nations to boost output more rapidly.

Opec+, which includes major producers such as Saudi Arabia and Russia, has repeatedly knocked back requests to pump more oil at its monthly meetings, causing frustration in the US.

India said it would release 5 million barrels, while Britain said it would allow the voluntary release of 1.5 million barrels of oil from privately held reserves.

Officials said it was the first time that the United States had coordinated such a move with some of the world’s largest oil consumers.

However, Brent crude rose by 2.9% to $82.01 per barrel when the London markets closed.

Shares in oil majors were among the day’s strongest performers on the FTSE 100 index.

Michael Hewson, chief market analyst at CMC Markets UK, said: “The decision by the US in conjunction with other partners, to release 50 million barrels from reserves, starting in December has seen prices rise, as oil traders cover shorts, amidst an expectation that Opec+ might delay or reduce their December output hike in response.

“While this is probably not the response the Biden administration was expecting, it was also entirely predictable given that it was so widely telegraphed, and it’s not something that the US can repeat.”

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