Oil be back: Prices recover despite Biden pushing China to release crude reserves
Oil prices recovered on Friday morning despite the potential for coordinated action from the world’s two largest economies.
Earlier this week, the White House made a rare request to China for it to release some of its oil reserves alongside Japan and India.
The US is looking counteract persistent benchmark rallies and surging prices by encouraging major oil buyers to release strategic reserves.
However the market has reacted defiantly, with investors seemingly betting the impact of releasing reserves will be less than first feared.
Brent crude was up 84 cents, at $82.08 barrel by 0844 GMT, after falling to a six-week low on Thursday afternoon before later rebounding 1.2 per cent higher.
U.S. West Texas Intermediate (WTI) crude for December delivery was up 78 cents to $79.79 a barrel during the same time period, having swung through more than a $2 range the previous session before closing up.
The December contract expires on Friday and most trading activity has shifted to the January future, which is up 73 cents, or 0.9 per cent, at $79.14 a barrel.
While the markets become increasingly tricky to predict, Brent and WTI are still set for a fourth week of declines.
US overtures to China act as warning to OPEC
The Biden administration’s push for a coordinated release of oil stockpiles follows a protracted dispute with OPEC and its allies (OPEC+).
OPEC + has maintained its restraint on production, even as prices have rebounded from the depths of the early stages of the coronavirus pandemic.
The organisation has refused to raise production targets above 400,000 per-day per-month through 2022.
This is despite calls from Biden to raise output to address concerns of high fuel prices in the world’s biggest economies.
It fears that any rebound in oil production and demand could be more fragile than currently anticipated.
Brent has surged almost 60 per cent this year, driven by a wider energy crunch as economies recover from the COVID-19 pandemic.