What comes next could send oil to $100 as OPEC and Russia account for over half of the world’s oil production and may well decided on December 2nd that it is time for them to act.
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- Biden’s announced earlier this week that the federal government would be releasing 50 million barrels of crude from the strategic petroleum reserve, perhaps those around him expected prices to go down significantly and stay down.
- Instead, prices rose, and OPEC+ gave a heavy hint it might cut supply. By Friday, oil prices fell sharply, but that was due to a new wave of Covid-19 fears and has little if anything to do with Biden’s announcement that oil would be unleashed from emergency stockpiles.
- Energy analysts warned that a release of SPR may not have the desired effect. They explained that however many barrels the U.S. or its partners in Asia and the UK release, OPEC could withhold more and for longer.
- They explained that the SPR crude is sour, and refiners don’t like it because it needs additional processing to reduce the sulfur content a process that requires natural gas, which is also expensive currently. These explanations fell on deaf but determined ears. Now, analysts are warning about $100 Brent.
- “It’s not going to work simply because the strategic petroleum reserve — any country’s strategic petroleum reserve is not there to try to manipulate price,” said Stephen Schork, editor of the Schork Report, speaking to CNBC earlier this week.
- “There’s a considerable amount of bets out there that we will see $100 a barrel oil,” he added.
SOURCE: OILPRICE.COM
Political | Process 
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