The inexplicable fluctuation of crude oil continued
on Thursday, perhaps fuelled by the anticipation of a potential move by the US
to calm the crude oil markets.
As of 14:45 on Thursday, the price of WTI and Brent
were at $81.83 and $83.19 respectively.
The US crude oil inventories, according to the industry-funded
API, American Petroleum Institute, fell down by 2.485 million barrels for the
week ending November, 5; it was significant on Tuesday for the crude oil market
watchers, as the good news came after six weeks of inventory builds.
On Wednesday, however, the EIA, the US Energy
Information Administration, contradicted the short-lived positive perception
with its own data; the crude build, according to the EIA, continued for the
seventh successive week, for the week ending
November, 5, with over 1 million barrels.
In response, the oil price fell during the early
hours of trading on Thursday, although prices recovered later on the day.
At present, there is a palpable anxiety lingering in
the crude oil markets over a potential response from the US administration, having
been snubbed by the OPEC+ - by refusing
to increase the oil output.
President Biden raised the stakes at the weekend
while referring to some unspecified tools that are at his disposal, if the
price of crude oil does not come down.
Since the impasse is purely a supply-demand issue,
analysts hope that the administration will tap the Strategic Petroleum
Reserves, SPRs, in order to deal with the supply side of equation. Although it
is not the last resort, the administration seems to be reluctant to go along
that path.
As the inflationary pressure bites, the momentum of
the collective appeal made by the most industrialized nations in the world to
the OPEC+ to increase the supply is gathering momentum on political front. No
nation appears to be insulated against the rising energy prices.
Analysts, meanwhile, do not pin their hopes on the
arrival of Iranian oil to the markets at any time soon; despite the optimism to
restarting the negotiations on November 29, the Iranian rhetoric does not
signal any early breakthrough. In the latest move, the Iranians said that the
talks were about lifting the sanctions and not about the nuclear issues.
In short, the US, which still calls shots when it
comes to the final outcome, and Iran are still far apart from each other as
never before along ideological fault lines.
In this context, analysts believe the possibility of
crude oil markets being swamped by the Iranian oil, is still very low. That
means the price of crude oil will hover over around $80 for months to come.
