New Delhi: Oil prices slipped below their seven-year high of $ 80 per barrel on Thursday after reports from Washington said the US had been looking for the release of strategic coarse reserves coordinated by India, China, Japan and South Korea with a view to tame prices, new movements Delhi said it was futile because it would have a small impact.
“Strategic oil reserves are never intended for situations like this …
this is for the Force Majeure situation, if there is an earthquake, the global outbreak of hostility, and oil equipment is closed,” India’s oil minister Hardeep Singh Puri told Bloomberg Wednesday when the news broke.
However, Global Benchmark Brent slipped below $ 80 per barrel-mark for the first time in six weeks because of the installation of concerns about increasing Covid cases in Europe and warmer winter predictions.
Words in China prepare to sell some reserves to domestic refiners added to the bottom pressure.
Together with the US, the four Asian economies formed five of the world’s top oil consumers.
At 39 million barrels against daily requests of nearly 5 million barrels per day, India’s strategic reserves were a small portion of 714 million US barrels, 475 million Chinese barrels and 324 million barrels of Japan, which could not knock backup for market intervention.
Even so, at all, reserves form 15 days of inventory globally, currently pegged at 99 million barrels a day.
Moving by White House Joe Biden seems to be an attempt to deflect the pressure at home as a smart American with high fuel prices and send a signal to OPEC + grouping after it was rejected to calm prices.
At home, Biden is under pressure to utilize reserves and prohibit oil exports.
India seems to be on the same ship as the US.
Puri, who attended the meeting, told Bloomberg TV, “I have spoken with my colleagues from Saudi Arabia, UAE, Russia” and made “mutual encouragement” on oil production (raising output).
“Separately, he told CNN,” there were five million barrels sitting there but they (OPEC) did not produce.
“Feedback about the discussion among the energy ministers of exports and consumers in the Adipec oil industry which has just been concluded in Abu Dhabi, suggested OPEC will maintain the current production level.
As a buildup in inventory shows no risk of supply.
The best India, which is Importing 85% of its oil needs, it can expect oil still bound to provide a headroom because the economy tries to release Pang Pandemi in the last quarter of 2020-21 fiscal.