US to extract 50m oil barrels from storage facilities

President Joe Biden has announced the release of oil on the US market in an attempt to lower petrol prices and end a market crisis that the ministry says could disrupt the global economy.

The President on Tuesday approved the release of 50m oil barrels – about 2.5 days for US oil – “in the coming months”, according to China, India, Japan, South Korea and the UK.

“Most importantly: today we are launching a massive oil-reduction operation – an effort that will spread across the globe and reach your oil refinery, God willing,” Biden told reporters Tuesday afternoon.

But efforts to lower oil prices over the last year appear to have paid off, with Brent’s global benchmark closing 3.3% higher after the news, $ 82.31 a barrel.

Officials initially demonstrated the possibility of using the repository at a Financial Times meeting last month, with US secretary of state Jennifer Granholm also commenting. was “considered”.

Saudi Arabia, Russia and other members of the Opec + oil traders’ group are involved opposed US repeated requests to increase supply.

The rise in oil prices came as traders calculated that the amount of fuel that would be released would be lower than expected, and that Opec + could reverse by blocking more oil than planned. OPEC did not respond to a request for comment.

It could be the massive release of crude oil from the US Strategic Petroleum Reserve – an emergency reservoir built after the oil crisis of the 1970s – beyond the barrels that split when the civil war in Libya sparked inflation in 2011.

Investigators say it is unlikely it will affect the prices Biden expects to do and that I am abusing the emergency services.

UK produces 1.5m barrels and India produces 5m barrels. Votes from other countries have not yet been confirmed.

The US will release 32m barrels “in the next few months” as part of an exchange to repatriate shares later. Other 18m barrels to be released include a quick oil sale which is approved by Congress and expected in the market.

Biden is facing political pressure to lower oil prices – up 60 percent in the last 12 months – and other sources of inflation, which have affected the approval of the President and other Democrats in Congress in the run-up to next year’s general election.

Granholm on Tuesday sought to blame the rise in prices for American oil producers, who said they were making “huge profits” and failing to maximize profits from the coronavirus epidemic.

Biden last week summoned the Federal Trade Commission, a competition regulator, to reduce raising prices in part.

The International Energy Agency, an oil watchdog that had previously linked to oil emissions, was not part of the White House statement. Some members, including Germany, opposed the entire release of the IEA, according to someone familiar with the matter.

The commission recognizes that rising oil prices have brought burdens on consumers and added pressure to inflation and “respect”.[ed] review and decisions made by the individual IEA member and the member states on how to respond effectively ”.

Additional reports by Jim Pickard in London and Amy Kazmin in New Delhi

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