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IEA chief criticizes artificial tightness in the energy market

The oil pump jack is depicted in the Kern River oil field in Bakersfield, California.

Jonathan Archon | Reuters

The head of one of the world’s leading energy authorities said some countries could not take a position to help calm the soaring oil and gas prices, criticizing the “artificial tightness” of the energy market. Stated.

“”[A] It should be emphasized that the factors that caused these high prices were the positions of some major oil and gas suppliers, and in our view, some countries did not take a useful position in this context. “. The International Energy Agency said at a press conference on Wednesday.

“In fact, some of the major stocks in today’s market can be considered artificially tight … In today’s oil market, reserve capacity of nearly 6 million barrels per day is the main production. I see it in OPEC + countries. “

His comment was made by an energy analyst US-led commitment to free oil from strategic stockpiles To curb soaring fuel prices.

In the first move of this kind, President Joe Biden announced the coordinated release of oil among the United States, India, China, Japan, South Korea and the United Kingdom.

The United States frees 50 million barrels from its strategic petroleum reserves. Of that total, 32 million barrels will be replaced in the coming months, and 18 million barrels will accelerate previously approved sales.

OPEC and non-OPEC producers, an influential group often referred to as OPEC +, Repeated dismissal The United States is calling for increased supply and easing prices in recent months.

Mr. Virol said the IEA acknowledged the announcement made by the United States in parallel with other countries and acknowledged that soaring oil prices have burdened consumers around the world.

“We will put more pressure on inflation when the recovery remains uneven and still faces many risks,” he added.

But Mr. Virol said he wanted to make it clear that this was not a collective response from the IEA. He said Paris-based energy agencies will only use energy stock in the event of a major supply turmoil.

“New and untouched price war”

Oil prices have skyrocketed by more than 50% year-to-date, hitting a few years high as demand surpasses supply.The momentum behind the price hike is seen by some predictors $ 100 barrel oilAlthough not everyone shares this view.

International benchmark Brent crude oil Futures traded in London on Monday afternoon at $ 82.27 a barrel, down about 0.1%. West Texas Intermediate Crude Oil Futures were $ 78.47 and remained almost unchanged during the session.

“There is a new, clear type of price competition in the oil market,” Louise Dixon, senior oil market analyst at Listad Energy, said in a research note Wednesday.

“The world’s largest oil consumers have promised to release unprecedented and relatively significant strategic stockpiles to the market in order to calm high oil prices during the pandemic recovery.”

Listad Energy said oil releases from the United States, China, India, Japan, South Korea and the United Kingdom could be sufficient to outpace crude oil demand next month if they begin as early as mid-December. Stated.

“This raises the question of how strategic the timing from Biden, Xi, etc. is if the basic grace is already close to 1Q22,” Dixon said.

“The oil market is the tightest and we needed a supply bailout in September, so there may be too many or too late releases,” she added.

— CNBC’s Pippa Stevens contributed to this report.

IEA chief criticizes artificial tightness in the energy market

Source link IEA chief criticizes artificial tightness in the energy market

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