In an effort to bring down sky-high gasoline prices which are driving US inflation to record levels the United States will be releasing 50 million barrels of crude oil from its strategic petroleum reserves in coordination with China, India, South Korea, Japan and Britain.
The move comes as oil producers block OPEC has shown itself reluctant to step up production beyond an already agreed to 400,000 barrels per day with the UAE and Saudi Arabia supporting an approach of cautious production rises. The block has warned it may respond by drawing down even these production rises, citing a potential over-supply environment in 2022.
US gasoline prices increased 50% year-over-year in October according to the Federal Bureau of Labor Statistics as generalized inflation increased 6.2% in the same span, putting enormous political pressure on the Biden administration to bring prices under control.
According to polling President Joe Biden’s approval ratings have been trending downwards from 53% approval at the beginning of his presidency to a current low of 43%, according to polling aggregator FiveThirtyEight.
Markets shrugged off this potential oil supply tug of war with oil prices rising in morning trading after the announcements.
(By Feike de Jong)