Goldman Sachs analysts called the volume of oil released from US state reserves and allies, “drops in the sea”. According to Reuters, the release of fuel will be from 70 to 80 million barrels of oil, while market participants expected 100 barrels and more.
“According to our pricing model, this volume will reduce the cost of oil for two dollars per barrel, which is significantly less than eight dollars per barrel recorded from the end of October,” the bank says. Earlier, the United States, India, Japan, South Korea and the United Kingdom agreed to release oil from government reserves. Thus, world leaders are trying to reduce oil prices that grow in conditions of reduction of supply and growth in demand against the background of restoration of the global economy after the coronavirus pandemic.
US President Joe Bayden has repeatedly applied to the organization of oil exporters and Russia asking for oil production. However, OPEC + decided to save the proposal at the same level. As the exporting countries explained, the demand for oil can still be reduced due to new outbreaks of coronavirus and locked, therefore it is not worth a hurry with an increase in production volumes. During negotiations with the leader of the PRC, Jinspin Biden asked China to free up oil reserves.
Great Britain, South Korea, Japan, China and India agreed to release oil reserves at the same time. After this solution, oil prices rose against the background of unjustified expectations of market participants. Brand Brent has grown in price by 1.52 percent, and WTI brand is 1.2 percent. At the time of writing news Brent is trading at 81.8 dollars per barrel, and WTI – $ 78.35 per barrel, according to ICE exchange.