Suez Canal Considering Incentives For Investors, Official Says


LONDON / NEW YORK: Oil prices were largely flat on Wednesday as investors questioned the effectiveness of a US-led release of oil from strategic reserves and focused on how producers would respond .
Brent crude rose 17 cents, or 0.2%, to $ 82.48 a barrel at 4:05 p.m. GMT, while US West Texas Intermediate crude futures were up 7 cents, or 0.1% , at $ 78.56.
The United States has said it will release millions of barrels of oil from strategic reserves in coordination with China, India, South Korea, Japan and Britain in an attempt to cool prices after l ‘OPEC + ignored calls to pump more.
Japan will release “a few hundred thousand kiloliters” of oil from its national reserve, but the timetable has not been decided, said its Minister of Industry Koichi Hagiuda on Wednesday.
China, the world’s largest importer of crude, has not expressed a commitment to its intentions to release oil from its reserves as requested by the United States.
Some countries have not taken a favorable stance in terms of oil and gas prices, the head of the International Energy Agency said on Wednesday, saying insufficient supply was reaching consumers.
Analysts said the effect on prices would likely be short-lived after years of declining investment and a strong global recovery from the COVID-19 pandemic.
The coordinated release could add around 70 to 80 million barrels of crude supply, less than the more than 100 million barrels valued by the market, Goldman Sachs analysts said.
“On our pricing model, such an exit would be worth less than $ 2 a barrel, far less than the sale of $ 8 a barrel that has occurred since late October,” the bank said in a note titled “a drop in the ocean”.
JP Morgan Global Commodities Research said any impact on oil prices from the release of crude may not be lasting. The brokerage also expects global demand for oil to strengthen and exceed 2019 levels by March 2022.
Attention has now turned to how the Organization of the Petroleum Exporting Countries, Russia and their allies will respond to the joint release of reserves.
OPEC and its allies are not currently discussing a suspension of increases in oil production, three sources said. The group is due to hold two meetings next week to set policy, with one meeting on December 1 for OPEC members only and another on December 2 for OPEC +, two sources said.
Jeffrey Halley, senior market analyst at OANDA, said the switch to tap storage was “a unique wonder and the markets responded appropriately.”
US crude inventories rose 1 million barrels last week, the Energy Information Administration said, compared to analysts’ expectations for a decline of 481,000 barrels.
Inventories of U.S. crude in the Strategic Oil Reserve fell last week to 604.5 million barrels, their lowest since June 2003.

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