A petroleum pump jack is pictured at the Kern River oil field in Bakersfield, California.
Jonathan Alcorn | Reuters
The head of the world’s leading energy authority has said some countries have failed to adopt a supportive position to calm rising oil and gas prices, criticizing the “artificial tightness” in energy markets.
,[A] Factors I would like to underline that the reason for these high prices is the position of some major oil and gas suppliers, and some countries have not taken a supportive position in this regard,” Fatih Birol, executive director of the International Energy Agency, told a press release on Wednesday. Said during the webinar.
“Indeed, some of the key strains in today’s markets can be construed as artificial tightness… because in the oil markets today we see about 6 million barrels of additional production capacity per day held by the major producers, OPEC+ countries. Is.”
His comments come as energy analyst A. assess the effectiveness of US-led resolve to free oil from strategic reserves To curb rising fuel prices.
In a first such move of its kind, President Joe Biden announced a coordinated release of oil between the US, India, China, Japan, South Korea and the UK.
The US will release 50 million barrels from the Strategic Petroleum Reserve. Of that total, 32 million barrels will be an exchange over the next several months, while 18 million barrels will be an acceleration of already authorized sales.
OPEC and non-OPEC producers, an influential group often referred to as OPEC+, have repeatedly dismissed The US has called for increasing supplies and lowering prices in recent months.
Birol said the IEA recognized the announcement made by the US in parallel with other countries, acknowledging that rising oil prices have burdened consumers around the world.
“This puts additional pressure on inflation in a period where the economic recovery remains uneven and still faces many risks,” he said.
Birol said he wanted to clarify that this was not the IEA’s collective response, however. He said the Paris-based energy agency only acts to tap energy reserves in case of a major supply disruption.
Oil prices have jumped more than 50% year-on-year, reaching multi-year highs as demand exceeds supply. The momentum behind the price rally has prompted some forecasters to predict a comeback as well $100 per barrel of oil, although not everyone shares this view.
international benchmark crude oil Futures trading in London on Monday afternoon was down about 0.1% at $ 82.27 per barrel, while West Texas Intermediate Crude Futures stood at $78.47, with little change for the session.
“There is a new and unknown type of price war going on in the oil market,” Lewis Dixon, senior oil market analyst at Rystad Energy, said in a research note on Wednesday.
“The world’s largest consumers of oil have promised an unprecedented and relatively large-scale release of strategic reserves on the market to cushion high oil prices amid the recovery of the pandemic.”
Rystad Energy said that if oil releases from the US, China, India, Japan, South Korea and the UK begin in mid-December, it will be able to meet crude demand as early as next month. Might be enough to complete.
“It begs the question of how strategic the timing is from Biden, Xi and others, if fundamental relief is already around the corner in 1Q22,” Dixon said.
“The release could be a case of too much, too late, as the oil market was tight and needed supply relief in September,” he said.
— CNBC’s Pippa Stevens contributed to this report.