Petroleum pump jacks are pictured in the Kern River oil area in Bakersfield, California.
Jonathan Alcorn | Reuters
The head of the world’s main energy authority has mentioned that some nations had failed to undertake a useful place to calm hovering oil and fuel prices, criticizing “artificial tightness” in energy markets.
“[A] factor I would like to underline that caused these high prices is the position some of the major oil and gas suppliers, and some of the countries did not take, in our view, a helpful position in this context,” Fatih Birol, government director of the International Energy Agency, mentioned Wednesday throughout a press webinar.
“In fact, some of the key strains in today’s markets may be considered as artificial tightness … because in oil markets today we see close to 6 million barrels per day of spare production capacity lies with the key producers, OPEC+ countries.”
His feedback come as energy analysts assess the effectiveness of a U.S.-led pledge to launch oil from strategic reserves to stymie surging gasoline prices.
In the primary such transfer of its sort, President Joe Biden introduced a coordinated launch of oil between the U.S., India, China, Japan, South Korea and the U.Ok.
The U.S. will launch 50 million barrels from the Strategic Petroleum Reserve. Of that whole, 32 million barrels will likely be an trade over the subsequent a number of months, whereas 18 million barrels will likely be an acceleration of a beforehand approved sale.
OPEC and non-OPEC producers, an influential group usually referred to as OPEC+, have repeatedly dismissed U.S. calls to improve provide and ease prices in latest months.
Birol mentioned the IEA acknowledged the announcement made by the U.S. parallel with different nations, acknowledging surging oil prices had positioned a burden on shoppers all over the world.
“It also puts additional pressure on inflation in a period where economic recovery remains uneven and still faces a number of risks,” he added.
Birol mentioned he wished to clarify that this was not a collective response from the IEA, nevertheless. The Paris-based energy company solely acts to faucet energy shares in case of a serious provide disruption, he mentioned.
‘A brand new and unchartered worth warfare’
Oil prices have jumped greater than 50% year-to-date, hitting multi-year highs as demand outstripped provide. The momentum behind the worth rally has even tempted some forecasters to predict a return to $100-a-barrel oil, though not everybody shares this view.
International benchmark Brent crude futures traded at $82.27 a barrel on Monday afternoon in London, down round 0.1%, whereas West Texas Intermediate crude futures stood at $78.47, little modified for the session.
“A new and unchartered type of price war is brewing in the oil market,” Louise Dickson, senior oil markets analyst at Rystad Energy, mentioned on Wednesday in a analysis observe.
“The world’s biggest consumers of oil have pledged an unprecedented and relatively sizeable release of strategic reserves onto the market to quell high oil prices amid pandemic recovery.”
Rystad Energy mentioned that if the oil set to be launched from the U.S., China, India, Japan, South Korea and the U.Ok. began as early as mid-December, it could possibly be sufficient to outpace crude demand as quickly as subsequent month.
“This begs the question of just how strategic the timing is from Biden, Xi and others if fundamental reprieve is already just around the corner in 1Q22,” Dickson mentioned.
“The release may be a case of too much, too late, as the oil market was tightest and needed supply relief in September,” she added.
— CNBC’s Pippa Stevens contributed to this report.