Biden announces the largest release of oil reserves in U.S. history Analysis said the move has had limited impact on domestic refined products

U.
S.
President Joe Biden announced on March 31 that he would release 1 million barrels of oil per day from the U.
S.
Strategic Petroleum Reserve over the next six months, accumulating 180 million barrels to cope with the current supply shortage and high oil prices, and called it the largest release
of oil reserves in U.
S.
history.

It is reported that the US White House issued a statement announcing new measures
for President Biden to deal with the rise in oil prices.
The new measure consists of two parts, an immediate increase in oil supplies and a true U.
S.
energy independence
, the statement said.

The United States released crude oil reserves International crude oil closed lower

The statement said the United States will make every effort to encourage domestic oil production and release oil from the strategic petroleum reserve as a bridge
to increase supply in the coming months.
At present, U.
S.
oil and gas production is close to record levels, and U.
S.
oil production is expected to increase by 1 million barrels per day this year and nearly 700,000 barrels
per day in 2023.

On the supply side, the U.
S.
government will make every effort to encourage domestic oil production and release an average of 1 million barrels of strategic oil reserves per day in the market over the next six months in response to the rising
prices of crude oil and gasoline, which are painful for U.
S.
consumers.

It is worth noting that the U.
S.
government has announced the release of a total of 80 million barrels of strategic petroleum reserves in November last year and March this year, of which the release of 50 million barrels announced in November last year was the largest in history, and today it is broken
by the total release of 180 million barrels of reserves in the next six months.

As the United States announced that it will release strategic crude oil reserves on a large scale in the next six months, the price of international crude oil futures fell
sharply on the 31st.
Outer Brent crude oil futures closed down 5.
20% at $105.
65/bbl; WTI crude futures closed down 6.
14 percent at $101.
20/bbl
.
On April 1, as of the close, the main domestic crude oil contract fell 5.
51% to 648.
7 yuan / barrel
.

Crude oil prices have always affected the nerves of the world, and for the United States to release crude oil reserves on the international oil prices can have a trend impact on the problem, the reporter interviewed Yongan Futures Beijing Research Institute crude oil analyst An Shengpei, who believes that the United States released crude oil reserves reflects the determination of the United States to
suppress high oil prices.

Since October last year, the United States and allies have released strategic reserves many times, but they are only short-term to alleviate the tight supply of crude oil, and have not fundamentally solved the situation of tight supply of crude oil in the medium term
.
The size of the US release of strategic reserves is 180 million barrels (1 million barrels per day), far more than the previous times, and the pressure
on the supply side of crude oil may be greatly alleviated in the short term.

OPEC conservatively increased production

Although the focus of the crude oil market is completely attracted by the United States' large-scale release of crude oil reserves, the impact of the OPEC Ministerial Conference as the Organization of the Petroleum Exporting Countries on the crude oil market should not be ignored
.

On March 31, the 27th OPEC and non-OPEC ministerial meeting was held in the form of a video conference, and as widely expected, the oil producer organization OPEC+ will soon agree on a production increase plan in May, which will release capacity
at a rate of 432,000 bpd.
The small production increase strategy of OPEC can be described as quite conservative
.

According to the statement released on the official website of OPEC, for the recent oil price trend, the member states believe that the continued oil market fundamentals and the consensus on the outlook show that the market is very balanced, and the current volatility is not caused by fundamentals, but by continued geopolitical risks
.

For the reason why OPEC said that it will not increase production on a large scale, An Shengpei told reporters: "The contradiction of insufficient supply in the current market is still prominent, and OPEC has absolute discourse power on the supply side
.
"

From the perspective of the willingness to increase production, the fiscal revenue of OPEC oil-producing countries mainly depends on oil and gas, then OPEC naturally tends to enjoy the dividend of high oil prices, if the additional production will only suppress oil prices, and will not let their own fiscal revenue increase, while sacrificing their own valuable surplus capacity, once their own surplus production capacity is insufficient, the control over the supply side will also be weakened
.

The decline in domestic refined oil products is limited

For the trend of crude oil in the future, An Shengpei believes that the release of strategic reserves by the United States may greatly alleviate the tight supply situation, but the peak season of refined oil demand in the summer superimposed on the tight supply, the probability of the second quarter will still maintain the situation of short supply, or make the second quarter crude oil prices still have the possibility of
rising.

Crude oil as the world's most important trading varieties, changes in supply and demand in any region is bound to cause fluctuations in crude oil prices on a global scale, and for the impact of the release of crude oil reserves by the United States on domestic oil prices, An Shengpei said: "Domestic oil prices basically follow Brent oil prices, slightly different is that Russia's exports of crude oil to the Asia-Pacific region have not been interrupted, and exports in March have increased, after all, the discount of Urals crude oil has reached nearly $30 / barrel, which is very attractive to buyers.
Therefore, the impact of sanctions on Russia on the domestic crude oil supply side will be less than in Europe
.
"

For the domestic refined oil price problem that we ordinary people are most concerned about, An Shengpei regrettably said that the decline in domestic refined oil products is limited, first of all, the refinery profits have been depressed for a long time, resulting in extremely low loads, even if the raw materials fall, it may also give priority to repairing the profits of refined oil, and secondly, the decline in the price of crude oil plates is reflected in the decline in the cost of raw materials in the refinery
.