Home ›› 19 Nov 2021 ›› World Biz
Oil prices slid to six-week lows on Thursday as China said it was moving to release strategic reserves after a Reuters report that the United States was asking large consuming nations to consider a coordinated stockpile release to lower prices.
The bid by the US to shock markets, asking China to join a coordinated action for the first time, comes as inflationary pressures, partly driven by surging energy prices, start to produce a political backlash, as the world fitfully recovers from the worst health crisis in a century.
Brent crude was down 83 cents, or 1 per cent, to $79.87 a barrel by 0749 GMT, after earlier dropping to $79.28, the lowest since Oct. 7.
US West Texas Intermediate crude futures were down $1.13, or 1.4 per cent, at $77.23 a barrel, having fallen earlier to $77.09, also the lowest since early last month.
Coordinated oil reserve releases "coincide with this virtual meeting between Biden and Xi Jinping. The US wants to arrest inflation and China probably wouldn't mind seeing a damper on oil prices," said John Driscoll, managing director at consultancy JTD Energy in Singapore. US crude oil futures & forward prices slump since Nov 1 as US government asked some of the world's top crude buyers to consider coordinated crude oil sales.
Prices hit seven-year highs in October as the market focused on the swift rebound in demand that has come with lockdowns to halt the coronavirus spread being lifted while the the Organization of the Petroleum Exporting Countries (OPEC) and its allies, called OPEC+, have slowly brought back supply after large cuts last year.
US oil producers have also been reluctant to overspend on drilling after they were punished by investors for gorging on debt to pay for new exploration.
The International Energy Agency and OPEC have said in recent weeks that more supply will be available in the next several months. OPEC+ is maintaining an agreement to boost output by 400,000 bpd every month so as not to flood the market with supply.
