Cyril Widdershoven, OilPrice.com: Oil Bulls Rejoice As Biden’s Supply Strategy Backfires
* President Biden’s attempt to coordinate a crude release from major importers around the world has had a limited impact on oil prices and is likely to send prices higher in the future
* While Biden has blamed OPEC+ for high oil and gasoline prices, the real reason is a combination of quantitative easing, underinvestment, and domestic policies
* It remains unclear how OPEC will react to the provocation from Biden, but comments from the cartel are unlikely to be diplomatic in the upcoming meeting
President Biden’s threat to oil producers that he would force prices down has already backfired. Oil markets were unimpressed by the U.S. administration’s plan to coordinate a strategic petroleum reserve release from major importers in an effort to increase supply. While some observers believe an SPR release could push oil prices down, most analysts have warned that it will only have a temporary effect and could eventually trigger a price spike. OPEC+ members have not even engaged with Biden’s strategy as they saw it as flawed from the start. The release of 50 million barrels of crude from the US SPR was never going to significantly impact oil prices. U.S. analysts are now worried that Biden’s actions could end up with higher oil prices.
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WNU Editor: OPEC+ will be using this US announcement of a strategic oil reserve release of 50 million barrels as one of the reasons why they should not increase production.
And as for other countries releasing some of their strategic stockpile. China is already backing off …. China so far non-committal to Washington’s oil release, OPEC+ unmoved (Reuters).