Nov 26, 2021 00:16 GMT
The measure, which will be carried out in coordination with other consumers, seeks to put downward pressure on world oil prices.
The United States will sell 32 million barrels of crude from four deposits of its strategic oil reserves, which will be supplied between the end of December and April 2022, as announced by the Department of Energy of the North American country.
The announcement responds to President Joe Biden’s plan, released Tuesday, to release 50 million barrels of national reserves in line with similar measures coordinated with some other countries to “address the mismatch between demand and supply” and reduce world prices.
However, the immediate effect of the measure was counterproductive, as futures prices for brands WTI and Brent with supply in January they experienced rises on Wednesday to 79.18 and 82.96 dollars per barrel, respectively.
Even so, brokers consulted by Reuters expect that the sale of crude from reserves, mainly an acidic mixture, or high in sulfur, will contain the prices of US acidic grades, as Mars and Southern green canyon, and benefit Asian customers, who mostly process this type of crude.
The first auction will include some 10 million barrels of Big Hill and a similar volume of Bryan Mound in Texas, about 7 million West Hackberry in Louisiana and another 5 million from Bayou Choctaw also in Louisiana, the Department of Energy said on its website.
Applications will be accepted on December 6 and contracts will be awarded no later than December 14. After December 17, the Department of Energy will announce the sale of other 18 million barrels.
The coordinated effort of large consumers of oil, led by the US, also includes Japan, South Korea, United Kingdom, China and india.
The measure is a response to the refusal of the member countries of the Organization of Petroleum Exporting Countries (OPEC) and its allies, to significantly increase production.