IEA agrees to release crude oil emergency reserves again

This is also the second time this year and the fifth time in history that the IEA has released crude oil emergency reserves.

After the United States announced the largest strategic oil release plan in history, the International Energy Agency also organized member states to reach a decision to sell reserves, in order to cooperate with the United States to ease the tight supply situation in the crude oil market and cool down oil prices.

"Looking at the performance of oil prices after the release of the news of the dumping of reserves in the United States, dumping of reserves has an obvious effect on the cooling of the crude oil market, especially the cumulative decline of the U.S. WTI crude oil front-month contract by about $10 per barrel, and it has fallen below $100 per barrel. It can be said that the dumping of reserves this time is unprecedentedly powerful, basically achieving the purpose of cooling the crude oil market, alleviating investors' anxiety about tight supply, and changing their expectations for oil prices. The sharp drop in oil prices has also eased the domestic energy and chemical industry. As for the pressure on the cost side, it can be seen that the prices of asphalt, fuel oil, and liquefied petroleum gas, which are highly correlated with crude oil, have generally fallen sharply, and other chemicals have also fallen to varying degrees."

"The decision of the United States and the International Energy Agency to sell the Strategic Petroleum Reserve has significantly suppressed the absolute price of crude oil. Because the core force of the organization to sell the reserves is the United States, we also see that the US WTI crude oil is under the most pressure and has the largest decline. , which makes WTI crude oil a price depression in the global crude oil market in a short time. The price difference between Brent crude oil and WTI crude oil has widened to 7 US dollars per barrel, and the price difference between SC crude oil and WTI crude oil is also at a high level. Obviously, low prices have increased WTI. It is no surprise that the export volume of U.S. crude oil will increase in the future. Compared with the recent sharp drop in crude oil, the European and American refined oil markets have shown obvious resistance to decline, and have begun to rebound sharply, especially diesel is still very strong. It shows that the current European energy market supply is still tight."

It is worth noting that the sell-off of strategic oil reserves did not clearly give the amount of reserves that all parties are more concerned about. Although Goldman Sachs and other institutions lowered their oil price expectations by $10/barrel, their outlook for oil prices in the third quarter is still $125/barrel. high position. "The impact of storage dumping on the cost of energy and chemical devices may also be short-term. First, the conflict between Russia and Ukraine has brought about changes in trade flows and a decline in crude oil supply, and the Russian-Ukrainian issue will not be resolved immediately in the short term. Second, OPEC's production increase has not yet been completed. Achieving the established goals. In addition, the Iranian nuclear agreement still needs to wait. The global crude oil supply is still in a tight pattern, and the impact of the release of this strategic oil reserve on the cost of energy and chemical products may be short-term.”