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In the United States, more than 48 million people are expected to travel by road this weekend in the context of the Thanksgiving celebration, marked by the increase in fuel costs that are 50% more expensive than the year last.
A more expensive dinner. As Americans prepare for the Thanksgiving celebration, President Joe Biden seeks to reduce the impact of fuel costs and pocket-hitting inflation by turning to the release of oil reserves with the support of other nations.
Biden announced the release of 50 million barrels of oil from the United States strategic reserve, a coordinated action with China, India, Japan, South Korea and the United Kingdom, after “several tough weeks of calls and meetings”, which did lower the price of gasoline 10% from the end of October in the wholesale market, Biden said.
“The fundamental question is: today we are presenting a great effort to moderate the price of oil, an effort that will encompass the entire planet and that will eventually reach the destiny of each person,” Biden said at a press conference, in which he blamed ” producing countries and large companies “to keep supply limited.
The United States will bring its oil to the markets in mid and late December, as part of measures to lower costs. Oil prices had fallen due to the announcement of the withdrawals, while several investors anticipated these measures that would contribute between 70 and 80 million barrels of oil to world markets. Although after the announcement, prices increased 2% instead of falling.
“The problem is that everyone knows that this measure is temporary,” said Claudio Galimberti, senior vice president of oil markets at Rystad Energy, adding that “once it stops, if demand continues to be above supply as now, then you go back to where you started. “
India confirmed the release of 5 million barrels of its strategic reserves, which in total are 38, while the United Kingdom confirmed that it will release up to 1.5 million barrels of its reserves. Japan and South Korea also joined the initiative, which the White House considers the largest coordinated release of the world’s strategic reserves.
Several analysts highlighted the alliance: the last time similar action was seen was in 2011 to replace lost production during the start of the civil war in Libya and was led by members of the International Energy Agency, without China.
“This day marks the official appearance of an ‘anti-OPEC +’ a group of oil-consuming countries that are taking the dynamics of the supply side into their own hands,” said Louise Dickson, from Rystad Energy.
The temporary solution could cause OPEC + to respond by delaying its increases in barrels per day, which would counteract the effect. “The president is ready to take additional action, if needed, and is prepared to use his authorities fully working in coordination with the rest of the world to maintain an adequate supply as we emerge from the pandemic,” the White House warned in a note. .
“Begging OPEC and Russia to increase production and now use the Strategic Petroleum Reserve are desperate attempts to deal with a disaster caused by Biden,” reacted Wyoming Senator John Barrasso.
The Strategic Petroleum Reserve is intended to be used in emergencies to preserve access to oil during natural disasters and problems with national security, for example. The reserves are stored in underground caverns along the Gulf coasts of Texas and Louisiana, and it is estimated that there are approximately 605 million barrels of oil in storage.
With Reuters and EFE
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