The price of oil fell to a near-six week low after the US was reported to have asked large oil-consuming countries to consider releasing crude stockpiles.
The US has asked China, Japan, India and other big oil users to tap their oil reserves to bring down prices, Reuters reported. China then said it was working to release some of its reserves.
The news sent the price of a barrel of Brent crude below the $80 mark to as low as $79.28. That was the lowest price since early October following a sharp fall on Wednesday after President Biden asked regulators to investigate potential illegal actions by oil and gas companies to keep prices high.
The US’s appeal to other big economies was an attempt to bypass Opec, which has refused to increase production to bring down the price of oil, which has hit a seven-year high. Soaring energy prices are adding to inflation, putting pressure on central banks to raise interest rates with economies still fragile.
Neil Wilson, an analyst at Markets.com, said: “Oil plumbed a six-week low despite a larger-than-expected draw on US inventories as the bearish sentiment remains in force amid warnings of oversupply, whilst the White House has requested several nations release barrels from their strategic reserves to lower prices. Joe Biden has also engaged the Federal Trade Commission to investigate US oil majors over possible illegal behaviour that is driving up prices.”
