Oil prices increased after investors assess the possible results of a coordinated release of strategic oil reserves in the largest states, such as China and the US. As of 9 a.m. Moscow time, Brent crude futures jumped by 0.97% to $82.03 per barrel, while WTI crude futures climbed by 0.96% to $79.77.
The information about the US initiative to discuss the possibility of a coordinated use of strategic oil reserves to reduce prices for this resource and fuel with the other major states triggered the market instability.
At the same time, according to experts, this initiative is unlikely to significantly reduce the cost of oil in the long term, because this market is quite narrow, that is, demand exceeds supply.
Even if the world's largest nations release their existing oil reserves, oil prices are likely to continue to rise next year. This may help prevent the rise in oil prices and reduce trading activity until the end of this year.
The US proposal to release strategic oil reserves was followed by the OPEC+ decision to increase oil production to eliminate the existing deficit and reduce the cost of fuel.
In 2021, the cost of Brent oil has already increased by 60%, which caused an energy crisis, as production increased gradually, and demand began to grow due to the recovery of the world's major economies after the pandemic.
Demand for Brent oil still exceeds supply, as evidenced by the difference in the cost of futures with short-term and long-term. Thus, the difference in the cost of Brent crude futures for the first month and six months later is $4.3 per barrel. However, this figure was lower than the high of $6.3 reached in early November, which indicates some reduction in tension on the market.
