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Oil resumes rally, U.S. reserve release seen as unlikely

CommoditiesOct 07, 2021 03:16PM ET
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© Reuters. FILE PHOTO: Pipelines run to Enbridge Inc.'s crude oil storage tanks at their tank farm in Cushing, Oklahoma, March 24, 2016. Picture taken March 24, 2016. REUTERS/Nick Oxford/File Photo

(Updates to settlement, adds analyst quote)

By Brijesh Patel

BENGALURU (Reuters) - Oil futures rebounded on Thursday, as the market deemed it unlikely that the United States would release emergency crude reserves or ban exports to ease tight supplies.

Brent futures rose 87 cents, or 1.1%, to settle at $81.95 a barrel, while U.S. crude gained 87 cents, or 1.1%, to settle at $78.30 a barrel. Earlier in the day prices at both benchmarks dropped $2 a barrel.

The U.S. Department of Energy said all "tools are always on the table" to tackle tight energy supply conditions in the market.

The department made the comment amid questions about whether President Joe Biden's administration is considering tapping into its Strategic Petroleum Reserves (SPR) or pursuing a ban on oil exports to bring down the cost of crude oil.

Meanwhile, Biden's national security adviser urged energy suppliers to lift flows to meet demand, saying that the United States is concerned about their failure to do so.

The United States has used its strategic reserves on occasion, usually after hurricanes or other supply disruptions. However, since ending a 40-year ban on crude exports in 2015, the nation has become a significant exporter, and has not broached cutting exports.

Earlier this week, the Organization of the Petroleum Exporting Countries and allies (OPEC+) agreed to raise output only gradually, sending crude prices to multi-year highs.

Oil markets have been on a steady rise due to tight supplies worldwide as demand recovered more quickly than expected from the COVID-19 pandemic in big import markets like China.

"The oil market is looking tighter in the short term, which suggests that prices will remain well supported until the end of the year," ING analyst Warren Patterson said in a note.

Major producers and the International Energy Agency believe crude demand could rise by anywhere from 150,000 to 500,000 barrels per day in coming months as users of natural gas switch to oil due to high gas prices.

(Additonal reporting by Arpan Varghese in Bengaluru, Ahmad Ghaddar in London, Naveen Thukral in Singapore; Editing by Marguerita Choy and Will Dunham)

Oil resumes rally, U.S. reserve release seen as unlikely
 

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Comments (9)
SP PURAYIL
SP PURAYIL Oct 07, 2021 10:58PM ET
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It is strategical movement to sell off oil procured at cheap price, now they recovered from Ida hurricane and all rigs are back to normal. price is going back to $60 within this month to make it cheap again!!!!
Home Cinema
Home Cinema Oct 07, 2021 2:10PM ET
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To much manipulations, tomorrow it will back to 75 , just price
perplexed76 .
perplexed76 . Oct 07, 2021 1:03PM ET
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so rising production and inventories are irrelevant for oil "investors".
Casador Del Oso
Casador Del Oso Oct 07, 2021 12:54PM ET
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Thanks Joe.
Steven Kemp
Steven Kemp Oct 07, 2021 9:31AM ET
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Just more TALK
Vlad Lozovskiy
Vlad Lozovskiy Oct 07, 2021 9:30AM ET
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Now Biden will sell entire oil reserves.  Great
Wilks Campbell
Wilks Campbell Oct 07, 2021 4:13AM ET
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Another example : if logistic disruption is so serious, then economic activity level would be lower, the chance of higher demand for oil or gasoline should be low. Some people with peanut brain said it is the NE pipeline problem. Come on, give me a break. You should ask who benefit if a panic purchase is created ? Wake up and see and learn how Wall Street gang work !
yusuf oz
yusuf oz Oct 07, 2021 4:13AM ET
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i couldnt agree more
Wilks Campbell
Wilks Campbell Oct 07, 2021 4:12AM ET
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BS! unexpected or misled ?
Yash Agrawal
Yash Agrawal Oct 06, 2021 9:56PM ET
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Wait $73 to again turn BULLISH way
 
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