The world's biggest economies said on Thursday they were looking into releasing oil from their strategic reserves, following a rare request from the United States for a coordinated move to cool global energy prices.
The U.S. move reflects frustration with the Organization of the Petroleum Exporting Countries and allies such as Russia who have rebuffed Washington's requests to speed up oil production as the world economy rebounds from the pandemic.
"Brent is now under 80 bucks," said John Driscoll, managing director at consultancy JTD Energy in Singapore. "It's having a short-term effect on oil markets. It's probably good for at least a 5% correction."told Reuters it was working on a release of its crude oil reserves, although it declined to comment on the U.S. request.
But because the current proposal involves China for the first time, it represents an unprecedented challenge to OPEC, the cartel that has influenced oil prices for over five decades.was set up in the 1970s after the Arab Oil Embargo to ensure the United States has adequate supply to weather an emergency.
Biden and top aides have discussed the possibility of a coordinated release of stockpiled oil with close allies including Japan, South Korea and India, as well as with China, over the past several weeks, sources told Reuters earlier.OPEC and other major producers including Russia, known collectively as OPEC+, have been gradually unwinding record production cuts made in 2020 by raising output by 400,000 barrels per day per month.
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