Oil Slips, Investors Look to OPEC+ Response to Crude Release

Oil prices fall on Thursday as investors await to see how OPEC+ responds to the emergency crude release by major consuming countries designed to cool the market.

"The release of oil from strategic reserves ramps up competition for control of the oil market amongst the world's biggest producers. We don't expect OPEC will stand by idly as the market enters a critical period“, ANZ analysts said in a note.

Investors now await the response of OPEC+, who are scheduled to meet next week to discuss oil demand and supply.

"The bold move from the oil importers has opened the door wide open for OPEC+ to adjust its supply policy downwards at its next (meeting on) 2 December 2021”, Rystad Energy analyst - Louise Dickson commented. 

Three sources told Reuters OPEC+ is not discussing pausing its oil output increases, despite the decision by the United States, Japan, India and others to release emergency oil stocks.

High oil prices have further added to inflationary concerns. A coordinated release from state oil reserves led by the United States could add around 70 million to 80 million barrels of crude supply to markets, analysts at Goldman Sachs  said. However, ANZ said the release of 70 million barrels of oil reserves could push the market into surplus. 

The US Department of Energy has launched an auction to sell 32 million barrels of strategic petroleum reserves (SPR) for delivery between late December to April 2022. It plans to release another 18 million barrels soon.

Traders are also looking out for whether China will follow through on plans to release oil from its reserves.

Brent crude futures fell 7 cents to $82.18 a barrel at 07.26 GMT, after losing 6 cents on Wednesday. WTI crude futures, in turn, fell 19 cents to $78.20 a barrel, extending an 11-cent loss on Wednesday.

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