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Oil futures saw strong gains Thursday, bouncing back on expectations the Organization of the Petroleum Exporting Countries and its allies would resist pressure from the Biden administration and to speed up production increases.
But the upside could be limited by the prospect the U.S. and other consumers could tap strategic oil reserves, analysts said.
West Texas Intermediate crude for December delivery
CL00,
CLZ21,
rose $1.76, or 2.2%, to $82.62 a barrel on the New York Mercantile Exchange. January Brent crude
BRN00,
BRNF22,
the global benchmark, was up $1.77, or 2.2%, at $83.76 a barrel on ICE Futures Europe.
Reuters, citing OPEC+ sources, reported Thursday that the group was likely to stick to its plan to boost output by 400,000 barrels a day in December, sticking to an earlier timetable for unwinding production cuts put in place in response to the COVID-19 pandemic. President Joe Biden earlier this week criticized Saudi Arabia and Russia for not doing more to boost production, and other consuming countries have also pressed for a more aggressive boost as oil trades near multiyear highs.
But that “might not be the end of the discussion,” said Robert Yawger, executive director of energy futures at Mizuho.
“There is speculation that major oil consumer nations will open their strategic petroleum reserves if OPEC+ does not play nice on Thursday,” he said, in a note. .
The U.S. Strategic Petroleum Reserve was holding 612.5 million barrels of crude oil, according to Wednesday’s weekly Energy Information Administration report, he noted, while China has the second most crude in its reserve, with Japan and South Korea rounding out the top four.
