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Japan PM confirms oil reserves may be released to curb prices

CommoditiesNov 20, 2021 06:41AM ET
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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 2/2

By Tetsushi Kajimoto

TOKYO (Reuters) -Japan is considering releasing oil from its reserves for the first time to curb surging oil prices, Kyodo news agency reported on Saturday, as Prime Minister Fumio Kishida signalled his readiness to counter oil price hikes following a request from the United States.

However, Japan may struggle to justify such a move, as under its own laws the country can release reserves only at a time of supply constraints or natural disasters, but not to lower prices.

The U.S. administration of President Joe Biden, who faces falling approval ratings and higher gasoline prices, has pressed https://www.reuters.com/business/energy/asia-looks-spr-shock-treatment-high-oil-prices-after-us-request-2021-11-18 some of the world's biggest economies to consider releasing oil from their strategic reserves to quell high energy prices.

The requests include asking China for the first time to consider releasing stocks of crude.

"We're proceeding with consideration as to what we can do legally on the premise that Japan will coordinate with the United States and other countries concerned," Kishida told reporters.

"We want to draw a conclusion after thoroughly considering the situation each country faces and what Japan can do."

Japan has tapped its reserves in the past to deal with the fallout of the Gulf War in the early 1990s and the deadly earthquake and tsunami in 2011.

Chief Cabinet Secretary Hirokazu Matsuno said on Thursday that Tokyo was closely watching the impact of rising oil prices on the world's third-biggest economy.

"While urging oil-producing nations to ramp up oil output, we will strive to stabilise energy markets by coordinating with major consumer nations and international organisations such as IEA (the International Energy Agency)," Matsuno said.

Resource-poor Japan gets the vast majority of its oil from the Middle East. Recent surging oil prices and a weakening yen are driving up the cost of imports, dealing a double blow to a trade-dependent nation.

Kishida's government on Friday unveiled a record $490 billion stimulus plan including measures to counter higher oil prices. It plans to subsidise oil refiners in the hope of capping wholesale gasoline and fuel prices to ease the pain to households and firms from rising oil costs.

"What's important is to urge oil-producing countries to ramp up oil production," Kishida said last month after discussions with cabinet ministers. "We will arrange concrete measures after confirming what industry sectors are being affected."

Japan PM confirms oil reserves may be released to curb prices
 

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Comments (13)
Ishwar Pandey
Ishwar Pandey Nov 21, 2021 12:39PM ET
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Using reserve is not law of economics to determine price. This is artificial increment of supply. When they stop using price or oil increases geometrically. So the news is just bitting in a bush.
Todd Gray
Todd Gray Nov 20, 2021 8:55PM ET
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Big oil hoses the people every chance they get, and they've certainly done that for many decades. Bidens anger is showmanship, because he's long known the law he been a part of creating has given them the right's to do just that. All American corporations are obligated, by law, to make as much money as possible. And, if that ruins the lives of millions of Americans, causes mass hunger or starvation, neither the corporations or the government gives a spit. If that were not true, the government would have changed the articles of incorporation decades ago.
Andrew Ulferts
Andrew Ulferts Nov 20, 2021 8:34PM ET
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The SPR has been releasing oil since AT LEAST April, now it’s relatively low already. It will have to be restocked. OPEC+ is in control, and they seem to be under instruction from President Trump to keep things tight until the election is overturned. There’s a new perspective for you oil haters. I hope we see $160 in 2022 and the bottom of the barrel. The ESG movement did this. Globalists want American energy dead. I bet they didn’t plan on an OPEC+ American alliance.
Empire Destroyer
Empire Destroyer Nov 20, 2021 8:34PM ET
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Man you watch too many patriotic spy and government conspiracy movies
Andrew Ulferts
Andrew Ulferts Nov 20, 2021 8:34PM ET
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I don’t watch movies, usually. It’s an unusual perspective I’m sure.
Scott Reyes
Scott Reyes Nov 20, 2021 9:24AM ET
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this about to get really ugly . you don't dump your reserves to drop prices that has the opposite affect. laws of supply and demand . just because it will ease the prices slightly doesn't justify it. once the supply drop opec could and may cut production as retaliation. then we have a repeat of 2008 again which to be honest I would love. I'm position very well tank the housing market and stocks and shoot up commodity prices.
Mir Chang
Mir Chang Nov 20, 2021 9:24AM ET
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Same.
Mir Chang
Mir Chang Nov 20, 2021 9:24AM ET
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Dont forget to sell the yen.
Lucky Man
Lucky Man Nov 20, 2021 9:07AM ET
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Good move to ease the inflation all over and cut the devil OPEC+ manipulated...they dont have heart they only need money - and then they die leaving everything without good memories....dump the OIL back to 60
Allen Drewe
Allen Drewe Nov 20, 2021 9:02AM ET
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This tactic of talking down oil price is obviously pathetic but seemingly affective. Japan cant do it. SK isnt going to do it yet people sell anyways.
Barani Krishnan
Barani Krishnan Nov 20, 2021 9:02AM ET
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Which is brilliant to get the market down $10. Covid will take another $10 off probably. Then OPEC will threaten to cut again. And US production will slowly start creeping by then. At some point, Putin will probably give the polite finger to the Salman brothers, and that will be the end of their magnificent 18 month cooperation, which is really a fairytale, if you ask me. OPEC and discipline: It's like oil and water; that's how well they blend. It's actually amazing that these price hawks pulled this off this far :)
New Jazenevd
New Jazenevd Nov 20, 2021 6:56AM ET
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Another misleading article, aka propaganda piece, from Reuters. In fact, Japanese prime minister explained politely, in his people manner, that he cannot release oil.
Louis Lipps
Louis Lipps Nov 20, 2021 6:22AM ET
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Somebody posted a chart of Japan's SPR and it's like 315k barrels so it's a headline and nothing else.  They can't release anything because they are almost lowest on record regarding current SPR.  That said bears won this week I'll give them that.  I guess the answer is lockdowns to get gas prices down so naturally punish the people for the governments bad policies.  Makes sense.
Jerry Liu
Jerry Liu Nov 20, 2021 2:52AM ET
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You can print papers, but you cannot create natural resorces…
Rod Quasney
Rod Quasney Nov 20, 2021 2:52AM ET
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True, you can't create natural resources, but you can tap and use them. Hence, natural resources.
Eric Malm
Eric Malm Nov 20, 2021 2:45AM ET
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Who would have thought that a US president would reach out to communist China for help and mercy so he can stay in power? Strange times we live in.
Empire Destroyer
Empire Destroyer Nov 20, 2021 2:45AM ET
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Who'd thought the land of the brave and free, uses guns to pretend to be brave and free markets manipulated by Fed and the 1%... all sold under the disguise of freedom and democracy 🤣
Kaveh Sun
Kaveh Sun Nov 20, 2021 2:04AM ET
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They announce it to please Biden. Nothing will b release. They r not s#
Steffen vdm
Steffen vdm Nov 20, 2021 1:24AM ET
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I thought oil reserves were only released for emergencies. Now it's used to curb prices. Indirect confirmation that inflation IS an issue and not some temporary thing. In fact inflation is becoming an urgency and politicians have no other option than releasing oil reserves. Of course they could hike rates, but none of the millionaire politicians wants to touch the stock market and ATH's
William Bailey
William Bailey Nov 20, 2021 12:40AM ET
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Print job will be short lived , but generate a quick buck for a few in the markets. The 1/2 trillion will burn off quick and Japanese population wont spend it because they know prices will fall and 0,0,0 will remain!!
 
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