Oil quotes rose on Tuesday after US President Joe Biden announced that the government will pull 50 million barrels of crude from the country's strategic reserves. This is in conjunction with the moves of China, India, Japan, Korea and the United Kingdom. It could force OPEC to reduce production targets in the near future.
However, the chart shows that traders may have expected larger volumes from Biden.
As mentioned earlier, the move could make OPEC adjust its plans on oil production during their meeting next week. After all, some members are unhappy with the announcement, so they will most likely propose larger output for December.
On a different note, Wood Mackenzie reported that inventories in Cushing, Oklahoma rose to around 344,000 barrels last week.
Meanwhile, India has not yet decided on the timing and volume of release of emergency oil reserves, but their move will be coordinated with other large consumers.
As for Japan, its law does not permit the sale of reserves due to high prices, but both the government and the private sector currently have more reserves than the minimum required by the law. Tokyo determined that it could legally use its stockpiles as long as it taps surplus supply
