Oil prices rose on Wednesday as investors saw only a marginal impact from the US-led move to release oil from strategic reserves to reduce fuel prices.
International benchmark Brent crude was trading at $82.66 per barrel at 0619 GMT for a 0.42% increase after closing the previous session at $82.31 a barrel.
American benchmark West Texas Intermediate (WTI) was at $78.91 per barrel at the same time for a 0.52% gain after trade ended at $78.50 a barrel in the previous session.
On Tuesday, US President Joe Biden announced his much-expected oil sale from the country’s Strategic Petroleum Reserves (SPR) to provide additional market supply and lower crude prices.
The US Department of Energy will release 50 million barrels of oil from the SPR, the largest petroleum stockpile in the world used for emergencies.
While 32 million barrels will be exchanged over the next several months, 18 million barrels will be accelerated from a previously authorized sale by Congress, according to the White House.
The move is a coordinated effort, a first of its kind, along with other major energy-consuming nations, including China, India, Japan, the Republic of Korea and the UK 'to maintain adequate supply as we exit the pandemic,' the White House said.
While China and Japan have not yet made a statement on the volumes they will release, South Korea said it will decide the details of the reserve sale after consultations with the US and other countries.
Goldman Sachs described the move as “a drop in the ocean” claiming the quantity is far below what the market needs.
Now investors are monitoring if the Organization of Petroleum Exporting Countries (OPEC) and its allies, also known as OPEC+, will respond to the US’s joint SPR oil sale move.
-US stocks expected to increase
Late Tuesday, the American Petroleum Institute (API) announced its estimate of a rise of over 2.3 million barrels of US crude oil inventories relative to the market expectation of a 950,000-barrel drop.
The predicted increase in stockpiles signals a drop in crude demand in the US, the world's top oil consumer, putting downward pressure on oil prices.
By Sibel Morrow