Sunday, November 28

After calling on major consumers to use its strategic reserves… Washington is discussing with OPEC to increase oil supplies to reduce prices

Washington confirmed that it had discussed with the Organization of Petroleum Exporting Countries “OPEC” (OPEC) increasing its oil supplies to lower prices, after it asked the world’s major consumers for a coordinated move to withdraw from the strategic reserves, and the American moves come as the Biden administration is trying to contain the significant rise in gasoline prices in United State.

Yesterday, Thursday, White House spokeswoman Jen Psaki said during a press conference that Washington had discussed with OPEC countries – including Saudi Arabia – the need to supply the market with oil.

Psaki added that the United States also discussed with China and other countries the possibility of a joint withdrawal of oil reserves, and that members of President Joe Biden’s national security team discussed the need to meet the demand for fuel.

Earlier this year, the Biden administration sought to pressure the Organization of the Petroleum Exporting Countries to increase the supply of oil in global markets to limit the rise in prices, but the organization did not respond to this, and some major exporters say that the increase in production will negatively affect investment.

US President Joe Biden had asked the major oil consuming countries – led by China, Japan, South Korea and India – to use part of their strategic reserves to calm the market.

According to Reuters, it is the first time that the United States has asked China to take a coordinated move to withdraw from strategic stocks to counteract rising prices.

While the “OPEC Plus” (OPEC +) alliance – which includes in addition to OPEC countries Russia and other producers – remained silent, Japan refrained from taking any step, while South Korea said it was studying the matter.

In China, the Government Reserve Office said it was working on using some of its crude oil reserves, without commenting on US demand.

Investigation with companies

The Biden administration is seeking to calm angry consumers inside the United States, as it decided to open an investigation with oil and gasoline companies suspected of manipulating to keep fuel prices high.

The American consumer complains of a sudden and sharp rise in gasoline prices in all US states.

The price of a gallon in California exceeded $4, a precedent not seen in the United States for at least 7 years.

This situation was reflected in the policies of President Joe Biden, whose popularity declined in opinion polls, while some Americans believe that OPEC is also responsible for this situation.

In addition to the main factor in the rise in global oil prices, there are other factors that led to a significant increase in gasoline prices in the United States, including the repercussions of Hurricane Ida, which forced a number of American companies in the south of the country to close oil refineries and distribution.

Voices rose from within Congress calling for President Biden to partially exploit the strategic stockpile of oil to ease the burden on citizens, considering that this step would restore the balance between supply and demand, even if temporarily.

oil prices

Meanwhile, oil prices stabilized today, Friday, as investors stopped after a day that witnessed severe fluctuations sparked by the possibility of a coordinated move by the world’s major economies to withdraw from their strategic stocks of oil.

During today’s trading in the Asian markets, Brent crude futures rose 28 cents (0.3%) to $ 81.52 a barrel, after falling to its lowest level in 6 weeks yesterday, Thursday, before changing the path and closing 1.2% higher.

The prices fell during yesterday’s trading to $79.28, the lowest level since October 7.

Prices reached their highest level in 7 years last month, with the market focusing on the rapid rise in demand, which coincided with the lifting of the closure that was in place due to the Corona epidemic and the recovery of economies in the face of a slow increase in supplies from OPEC and its allies within the “OPEC Plus” grouping.

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