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In order to reduce pressure on prices, the United States will draw an additional 15 million barrels from its strategic oil reserves in December, the last tranche of the program announced in the spring by Joe Biden.
The United States will draw an additional 15 million barrels from its strategic reserves of oil to try to relieve the price of black gold, and President Joe Biden does not rule out using more, said Tuesday, October 18, a government official.
This new extraction, which will be carried out in December, constitutes the last part of the program announced in the spring by the American head of state and which provided for the release of a total of 180 million barrels to cope with the surge in prices linked to the invasion. from Ukraine.
“The President has instructed the Department of Energy to stand ready to sell more (oil from reserves) this winter if necessary, due to Russia or other market-disrupting actions,” the official said. to journalists.
The news of this additional use, reported by several American media on Tuesday in the day, was enough to drop crude prices earlier in the day. The price of a barrel of West Texas Intermediate (WTI), the American reference variety, for delivery in November, had thus fallen by 3.08%, to end at 82.82 dollars.
“All the tools on the table”
Already largely digested, the official announcement did not react to prices in electronic trading on the CME Stock Exchange. Around 11:45 p.m. GMT, the WTI thus took more than 1%, while the fact of injecting millions of additional barrels into the market is theoretically more likely to lower prices.
Asked about the possibility of limiting or suspending oil exports, the government official explained that the Biden administration “keeps all the tools on the table, anything that could help secure the supply” of the American market.
At the same time, the American president plans to put in place a mechanism to replenish the strategic reserves in the long term. The US government will start buying back crude when the price of WTI drops to a range between $67 and $72.
The administration plans to negotiate repurchase contracts at a price agreed in advance, through an auction process, which will limit the risks associated with price volatility, according to the official.
Midterms
Since the beginning of September 2021, the United States has extracted more than 212 million barrels of strategic reserves, which are at their lowest since June 1984. Never has a president released such quantities since the creation of these reserves in 1975.
The president also calls on oil companies to “immediately pass on lower energy prices to customers”, according to the official. “Keeping prices high when costs are falling is unacceptable,” he insisted.
As the November 8 legislative election approaches, Joe Biden wants to avoid a rise in the price of gasoline, a strong marker for American motorists. Although it has fallen 22% since its peak in mid-June, the price of regular gasoline remains 16% higher than its level last year at the same time. As for diesel, it has only fallen back moderately since June, due to very low stocks, and costs 50% more on average than a year ago.
With AFP