eCommerce

Oil is rising, and markets are awaiting a decision on US crude reserves

China’s oil imports fell last October to their lowest level in 3 years

Oil futures prices recorded a rise at the start of the new week’s trading today, Monday, at a time when traders are evaluating the possibilities of pumping quantities of the American strategic reserves of crude oil, after the OPEC Plus alliance decided not to increase production by more than the predetermined amount of 400,000 barrels per day.

Brent crude futures prices for January delivery rose 0.89% to $83.48 a barrel.

US West Texas Intermediate crude prices for December delivery also increased by 1.03% to $82.11 a barrel.

Brent crude has risen by more than 60% since the beginning of the year, with global demand for oil recovering from the impact of the pandemic.

On Sunday, US Energy Secretary Jennifer Granholm said that the US administration will study the official inventory and production data due to be released next Tuesday before deciding whether to intervene in the oil market.

The recent rise in oil prices to their highest levels in nearly 7 years has prompted US President Joe Biden to act to confront the repercussions of this rise, and try to limit them.

Baden called on the Organization of the Petroleum Exporting Countries (OPEC) and its allies in the “OPEC Plus” alliance last week to accelerate the pace of increasing their production of crude oil, which was ignored by those countries and kept the plan to gradually increase production during their meeting last Thursday.

Investments in oil and gas

Meanwhile, UAE Energy Minister Suhail Al Mazrouei said on Monday that insufficient investments in the oil and natural gas industry could lead to higher energy prices.

The UAE minister added that the OPEC Plus alliance managed oil supply and demand well, and that without the alliance’s strategy, oil prices would have been higher now.

He pointed out that the alliance continues to work to achieve balance in the market and stimulate investment in oil and gas.

What about China?

In China, the country’s oil imports fell last October to their lowest level in 3 years, as major state-owned refiners refrained from buying due to high prices, while independent refiners were restricted by limited import quotas.

Data from the General Administration of Customs showed on Sunday that the world’s largest importer of crude oil received 37.8 million tons last month, which is equivalent to 8.9 million barrels per day.

This is less than 9.99 million barrels per day last September and 10.02 million barrels per day in the same period last year.

And crude imports are declining on a monthly basis for the second month in a row, and the decline occurred in light of a 62% jump in crude oil prices this year with the resumption of global economic activities after restrictions imposed due to the Covid-19 pandemic, which led to an increase in demand for fuel.

The purchases were also affected by Beijing’s crackdown on illicit dealings in crude oil quotas and import allocations for independent oil refiners.

What are America’s options?

Al-Jazeera correspondent from Washington, Fadi Mansour, said earlier that many analysts believe that President Joe Biden has 3 main options after OPEC Plus ignored his calls:

  • The first is the use of part of the strategic oil reserve of the United States, which is about 600 million barrels of oil stored in the states of Texas and Louisiana.
  • The second: That Biden stop exporting US oil abroad in order to use it to boost the consumer side of it on the domestic market.
  • The third is the option of sanctions through what is known as the “NOPEC” project before Congress, in which sanctions can be imposed on OPEC and its allies on the basis that it monopolizes the oil market and manipulates its prices.
    Al-Jazeera correspondent says that none of these options will lead to direct results on fuel prices at home, knowing that President Biden in the end, after threatening him twice, should take some step in order to appear in a comfortable political position and able to influence the markets Oil and OPEC.

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Reference-www.aljazeera.net

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