Wednesday, February 1, 2023

Coordinated emergency oil release on the cards, says White House official

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The Joe Biden administration is “exploring” another release of emergency oil stocks with ally countries if needed, a White House official told S&P Global Platts on Thursday.

“No decisions have been made,” the Platts quoted the official saying.

The White House signaled Feb. 22 that it was building a case for a globally coordinated crude stockpile release as the Russia-Ukraine conflict escalated, threatening to spike oil prices and disrupt supplies.

Oil futures moved sharply higher on Thursday after Russian forces launched widespread attacks on Ukraine following weeks of uncertainty and tension. April ICE Brent crude reached an intraday high of $105.79/b in early European trading, up 9% from the previous close, while April NYMEX WTI crossed $100/b earlier in the day, reaching an intra-day high of $100.53/b.

The International Energy Agency said Feb. 22 that member countries “stand ready to act collectively to ensure that global oil markets are adequately supplied.”

IEA members hold close to 4.16 billion barrels in total oil stocks as of end-2021, including 1.5 billion barrels held by governments as emergency reserves. The group of the world’s top oil-consuming countries requires members to hold 90 days of net imports in government or commercial storage.

The Biden administration has “an ongoing effort right now to execute on a plan that’s in coordination with oil producers and oil consumers to make sure the world knows we’re going to have stable energy supplies,” a senior US official said Feb. 22.

Biden ordered a release of 50 million barrels from the SPR in November, when WTI prices were about $78/b.

The US SPR held 582.4 million barrels as of Feb. 11, the lowest since September 2002.

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