BAKU, Azerbaijan, Nov.25
By Leman Zeynalova – Trend:
OPEC+ is unlikely to respond aggressively to the strategic petroleum reserves (SPR) release, Trend reports with reference to CreditSights.
Multiple countries have announced a response to "elevated" oil prices with a coordinated release of strategic petroleum reserves (SPR). The U.S. has formally announced a 50 mmb SPR release over “the next severalmonths,” India has formally announced a 5 mmb SPR release, China will reportedly release at least 7 mmb from its SPR, the U.K. is allowing as much a 1.5 mmb of privately held reserves to be released voluntarily, Japan will reportedly release several days worth of volume (the country consumes 3.7 mmbd), and South Korea is expected to announce the size and timing of its SPR release after completing discussions with partners.
“OPEC+ has not issued a formal statement in response to the coordinated strategic petroleum reserves release but we think it is safe to assume that members are less than pleased. The group has taken an extremely conservative stance towards restoring supply since it began easing curtailments in 3Q20 and has consistently cited an uncertain demand outlook as the impetus for sticking with plans to increase production by 400 kbd on a monthly basis despite a 55 percent+ rally in crude prices YTD,” reads the report.
SPR releases may or may not have been contemplated as part of the groupʼs planning process at its last meeting on November 4, however, they will certainly be part of the discussion at the groupʼs forthcoming meeting on December 2, according to CreditSights.
“We see virtually zero chance that the group responds to the coordinated SPR releases by flooding the market,” said the company.
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