RIYADH: Oil prices rose to a one-week high on Tuesday after a move by the United States and other consumer nations to release tens of millions of barrels of oil from Strategic Petroleum Reserves to try to cool the market fell short of some expectations.
The US decision came after members of the Organization of the Petroleum Exporting Countries and their allies, otherwise known as OPEC+ rejected calls for increased oil production.
Talking to Arab News, Ayid Alswadain, a Riyadh-based independent analyst, said the oil producers’ alliance was very clear in its stance. It had made clear that it would make decisions to maintain balance in the market and adjust production accordingly.
When asked about a possible OPEC+ response to the SPR releases, he said: “I don’t expect any change in the course of production for next month,” Alswadain added.
The US has decided to release 50 million barrels from SPR, which will start hitting the market in mid to late December.
Alswadain said out of these 50 million barrels, 18 million have already been utilized.
“The remaining 32 million barrels will be in exchange,” Alswadain added.
“I don’t expect these 32 million barrels will be pushed in one day since the maximum allowable withdrawal from the SPR is 4.4 million per day,” he added.
Brent futures rose $2.65, or 3.3 percent, to $82.35 a barrel by 12:52 p.m. EST (1752 GMT), while US West Texas Intermediate (WTI) crude rose 2.5 percent, to $78.66.
That puts Brent on track for its biggest daily percentage gain since August and its highest close since Nov. 16. It also pushed Brent’s premium over WTI to its highest since mid-October.