MONDAY, 6 DEC 2021

 

CONNECT

Facebook Linked In Twitter
Gold_November_leaderboard
GloriaJeans_266x90px
IMH LTD

Pope's Visit And Meetings In Cyprus Send Strong Message Of Solidarity, President Says

Cypriot FM Invites Egyptian Counterpart To Nicosia

gloria_christmas_266x90
IMH LTD

INTERNATIONAL

brought to you by CIPA

U.S. Set To Unveil Emergency Oil Release In Bid To Fight High Prices

U.S. Set To Unveil Emergency Oil Release In Bid To Fight High Prices

The United States is expected to announce a loan of crude oil from its emergency stockpile on Tuesday as part of a plan it hashed out with major Asian energy consumers to lower energy prices, a Biden administration source familiar with the situation said.

The move is designed to tame soaring energy prices after the OPEC producer group and its allies rebuffed repeated requests from Washington and other consumer nations to pump more quickly to match rising demand.

U.S. President Joe Biden is facing low approval ratings due to high prices for gasoline and other consumer items in the recovery from the coronavirus pandemic, posing a threat to him and his Democratic party ahead of next year's congressional elections.

A so-called "swap" from the U.S. Strategic Petroleum Reserve (SPR) will be announced on Tuesday in a move coordinated with several countries, the source said. The source did not specify how much oil would be released from the stockpiles.

Biden has already asked China, India, South Korea and Japan to release strategic oil stocks in concert with the United States. Japanese and Indian officials are working on ways to do that, Reuters reported.

The unprecedented effort by Washington to team up with major Asian economies to lower energy prices is intended as a warning to major producers that they should pump more oil to address concerns of high fuel prices in powerhouse economies.

OPEC+, which groups the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, plans to meet on Dec. 2 to discuss output policy.

The impact of a coordinated oil release would depend on the timeframe and quantity, but a release of more than about 60 million barrels in around 30 days would be seen by the market as "very negative for pricing", said Commonwealth Bank of Australia analyst Vivek Dhar.

"This situation is coming at a time when this market was shifting and global oil stockpiles are rising. So this could see prices fall more steeply than you think," he said, pointing to new coronavirus lockdowns in Europe.

OIL OFF HIGHS

The United States historically has worked with the Paris-based International Energy Agency (IEA), a bloc of 30 industrialized energy-consuming nations when global supply issues demand a coordinated release of stocks.

Japan and South Korea are IEA members, while China and India are only associate members.

Under an SPR swap, oil companies take crude oil from the stockpiles but are required to return it - or the refined product - plus interest. Swaps are typically offered when oil companies face a supply disruption like a pipeline outage or damage from a hurricane.

Outright sales are less common.

U.S. presidents have authorized emergency sales from the SPR three times, most recently in 2011 during a war in OPEC member Libya. Sales also took place during the Gulf War in 1991 and after Hurricane Katrina in 2005.

Current high prices have not been caused by a supply disruption, but rather a rebound on global energy demand from lows struck during lockdowns in the early days of the coronavirus crisis.

OPEC+ has been adding around 400,000 barrels per day to the market on a monthly basis to meet the increasing demand, but has resisted Biden's calls for more rapid increases, arguing the rebound in demand could be fragile.

The threat of a coordinated release of stockpiled oil onto the market, along with new coronavirus-related lockdowns in Europe, has knocked the wind out of crude oil's rally lately. Brent crude was last trading around $79.30 a barrel, down more than $7 from a peak reached in late October.

Citigroup analysts estimated that a combined release of oil from the United States and other countries could be "on the order of 100-120 million bbls or higher."

One source familiar with the discussions, however, said the input from China and other countries is still very much up in the air, and that nations like India and South Korea would be likely to contribute just a small amount of barrels.

Source: Reuters

MORE ON INTERNATIONAL

Twitter Co-Founder Jack Dorsey Steps Down As Chief Executive

Twitter co-founder Jack Dorsey is stepping down as chief executive of the company. ...

Nissan To Spend €15.62 Bln Over 5 Years In Electrification Push

Nissan Motor Co (7201.T) announced it will spend 2 trillion yen ($17.59 billion, €15.62 ...

South Africa's President Calls For Lifting Of Omicron Travel Bans

South Africa's president has condemned travel bans enacted against his country and its ...

FROM AROUND GOLDNEWS

   

Total New Loans Down By €72.6 Million In October Says Central Bank Of Cyprus

Total new loans granted by Cyprus’ banks decreased by € 72.6 million in October 2021, compared to the previous month, mainly due to the significant reduction ...
   

City Of Dreams Mediterranean Appoints Jose Diaz As Executive Chef

Melco Cyprus announces its forthcoming integrated resort (IR), City of Dreams Mediterranean, has appointed Mr. Jose Diaz as Executive Chef.
   

Pope Francis: In Cyprus There's An Atmosphere Typical Of The Holy Land, Thankful To Meet Believers Who Live In Hope

Pope Francis said on Friday in Cyprus, he feels an atmosphere typical of the Holy Land, where antiquity and the variety of Christian traditions enrich every ...
   

Does This Ever End?

"Does this ever end?" A question asked by many nowadays as a newly detected coronavirus variant in Botswana and South Africa causes panic across the world.
   

ECB's Knot: High Inflation Could Warrant Rate Hike In 2023

If inflation continues to exceed expectations next year, the European Central Bank (ECB) could decide to raise interest rates in 2023, ECB policymaker Klaas ...
   

Inflation in Cyprus rises to 4.3% in November

Inflation in Cyprus rose to 4.3% in November mainly due to the sharp rise in electricity and petroleum products prices.
   

Pope's Visit And Meetings In Cyprus Send Strong Message Of Solidarity, President Says

Pope Francis` visit to Cyprus and the meetings he holds send a strong message of solidarity in our common cause and joint objectives and are a testament of the ...
   

Cypriot FM Invites Egyptian Counterpart To Nicosia

Minister of Foreign Affairs, Nikos Christodoulides, extended an invitation to his Egyptian counterpart Sameh Shoukry to visit Nicosia in the coming period.
 

YOUR COMMENTS

HEADLINES

MOST POPULAR

leptos_limassol_park_en
IMH_COMPANY_PACK_2021

IMH LTD