Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Japan, India working on oil-stock release with U.S., timing unclear -sources

Commodities Nov 22, 2021 06:31PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: A branch of Cosmo Energy Holdings' Cosmo Oil service station is seen in Tokyo, Japan, December 17, 2015. Picture taken December 17, 2015. REUTERS/Yuya Shino/File Photo 2/2

By Ritsuko Shimizu, Yoshifumi Takemoto, Aaron Sheldrick and Nidhi Verma

TOKYO/NEW DELHI (Reuters) -Japanese and Indian officials are working on ways to release national reserves of crude oil in tandem with the United States and other major economies, but the timing of such a release remains unclear, seven government sources with knowledge of the plans told Reuters.

Such an announcement could come as early as Tuesday, according to a source familiar with the discussions, but White House and U.S. energy department officials said no official decision on a release had been made.

U.S. President Joe Biden has asked China, India, South Korea and Japan for a coordinated oil stocks release as U.S. gasoline prices soar and his approval ratings slump ahead of next year's congressional elections.

The U.S. government has been unable to persuade OPEC+ to pump more oil, with major producers arguing the world was not short of crude.

OPEC and other producers including Russia, known collectively as OPEC+, have been adding around 400,000 barrels per day to the market on a monthly basis, but have resisted Biden's calls for more rapid increases, arguing the rebound in demand could be fragile.

The threat of a coordinated release, along with new coronavirus-related lockdowns in Europe, has knocked the wind out of crude oil's rally. Brent crude was last trading at $79.30 a barrel, down more than $7 from a peak reached in late October.

Citigroup (NYSE:C) analysts estimated in a note that the United States could release anywhere from 45 million to 60 million barrels from its reserves that would bring forward about 20 million in already approved sales. The bank said a combined release could be at "on the order of 100-120 million bbls or higher."

One source familiar with the discussions, however, said the input from China and other countries is still very much up in the air, and that nations like India and South Korea would be likely to contribute a small amount of barrels.

Such a move could compel OPEC+ to also reassess whether it would continue its current course of steady increases, said Joseph McMonigle, Secretary General of the Riyadh-based International Energy Forum (IEF).

"If they are going to make a change, it will be because of unforeseen external factors, such as these lockdowns in Europe, any kind of strategic release, and shifts in jet fuel demand," said McMonigle. The IEF is the largest international organization of energy ministers and includes Saudi Arabia, the United States and Russia.

The increase in COVID cases in Europe supports recent comments from the likes of OPEC Secretary General Mohammed Barkindo, who said the market will soon be facing a surplus. In that case, OPEC members with more room to boost output may instead prefer to maintain current production or even reduce it.

"An SPR release could easily backfire," said Troy Vincent, market analyst at DTN.

Japanese Prime Minister Fumio Kishida signalled his readiness to release stocks over the weekend.

Three Indian government sources said on Monday they were holding consultations with the United States on the release of oil from strategic reserves.

Japan, the world's fourth-biggest oil buyer, is restricted on how it can act with its reserves - made up of both private and public stocks - which typically can only be used in times of shortage.

One Japanese source said the government was looking into releasing from the portion of state-held stocks outside the minimum amount required as a legal workaround.

Japan's oil reserve held 145 days' worth of daily petroleum consumption at the end of September, according to official data, well above the minimum 90 days required by law.

Japanese private companies including refiners hold about 175 million barrels of crude and oil products as part of the Strategic Petroleum Reserve (SPR), enough for around 90 days' consumption, according to state agency Jogmec.

India holds about 26.5 million barrels of oil in its SPR.

Japan, India working on oil-stock release with U.S., timing unclear -sources
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
John Laurens
John Laurens Nov 22, 2021 8:27PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Japan and India need to work on things together more often. Good for the region.
Muhamed Jaffir
Muhamed Jaffir Nov 22, 2021 2:38AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
How about you leave Japan with their oil, so we don't weaken them in the region. Then undo the mess Biden-san has made of US energy production.
Ed Kutch
Ed Kutch Nov 22, 2021 2:38AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
what mess? All Biden did was close down some oil pipelines. Come on man.
Benjamin USA
Benjamin USA Nov 22, 2021 2:38AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
No Ed! everything is bIdEn’s FaUlT
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email