London — Oil prices steadied on Thursday as investors kept an eye on major producers’ response to the US-led emergency oil release designed to cool the market and with Opec expecting the release to swell inventories.
Brent crude futures gained 7c to $82.32 a barrel at 11.27am GMT. US West Texas Intermediate crude futures fell 12c to $78.27 a barrel.
Opec expects the US release to swell a surplus in oil markets by 1.1-million barrels a day, a source from the group said.
Opec, Russia and allies, together called Opec+, will meet on December 1-2 to set policy.
“The bold move from the oil importers has opened the door wide open for Opec+ to adjust its supply policy downwards at its next meeting,” Rystad Energy analyst Louise Dickson said.
Opec+ has been adding 400,000 bbl/month since August, unwinding record output cuts made last year when pandemic curbs hammered demand.
Three sources said Opec+ isn’t discussing pausing its oil output increases, despite the decision by the US, Japan, India and others to release emergency oil stocks.
Opec members the UAE and Kuwait said they were fully committed to the Opec+ agreement and had no prior stance ahead of next week’s meeting.
Iraq, also an Opec member, said it backs continuing with the existing plan of raising output by 400,000 bbl/month, saying the outlook for the oil market was unclear due to turbulence in global markets.
High oil prices have added to inflationary concerns. A co-ordinated release could add 70-million to 80-million barrels of crude to markets, analysts at Goldman Sachs said.
The US department of energy has started an auction of 32-million barrels of strategic petroleum reserves for delivery from late December to April 2022. It plans to release another 18-million barrels soon.
Traders are also looking out for whether China will follow through on plans to release oil from its reserves.
US Energy Information Administration data on Wednesday showed petroleum and distillate stockpiles fell more than expected, while crude stocks rose.