Brent crude futures extended declines for a third session, falling 96 cents, or 1.2%, to $ 81.26 a barrel at 1:30 a.m. GMT. U.S. West Texas Intermediate (WTI) crude fell $ 1.35, or 1.7%, to $ 77.04 a barrel. There were no settlements for WTI Thursday due to the Thanksgiving holiday.
The administration of US President Joe Biden on Tuesday announced plans to release millions of barrels of oil from strategic reserves in coordination with other major consuming countries, including China, India and Japan, in an attempt to cool the price.
Such a release is likely to inflate supplies in the coming months, an OPEC source said, according to the findings of a panel of experts advising ministers from the Organization of the Petroleum Exporting Countries (OPEC) .
The Council of the Economic Commission (ECB) expects a surplus of 400,000 barrels per day (bpd) in December, rising to 2.3 million bpd in January and 3.7 million bpd in February if the countries consumers are moving ahead with the publication, the OPEC source said.
Forecasts of a rising oil surplus cloud the outlook for OPEC’s meeting with its allies, a group known as OPEC +, on December 2 to decide on immediate production. The group must decide whether it will continue to increase production by 400,000 bpd in January.
Still, benchmark contracts are expected to post their first weekly gain in nearly a month, as the overall crude reserve release volume estimated at 70 million to 80 million barrels was lower than market participants expected.
“Since the volume is small, I think it is aimed at easing the tightening of supply, rather than having a big impact on the oil markets,” Tsutomu Sugimori, president of the Association, told reporters on Thursday. Japan Oil Company (PAJ).