Crude oil rose about 3 percent as the U.S. announced the release of more crude inventories

News on October 19: On Wednesday, international crude oil futures rose, basically recovering all the lost ground
on Tuesday.
Oil prices were supported
by a decline in U.
S.
commercial crude inventories and a tighter global supply outlook despite the U.
S.
government's announcement of the release of more strategic crude inventories.

By the close, the most actively traded West Texas Intermediate (WTI) December contract on the New York Mercantile Exchange (NYMEX) was up $2.
45 or 3.
0 percent at $84.
52 a barrel
.
The November contract expiring on Thursday rose $2.
73 or 3.
3 percent to $85.
55 a barrel
.

The global benchmark December Brent crude rose $2.
38 or 2.
6 percent to $92.
41 a barrel
.

President Biden said in a speech on Wednesday that the United States would release 15 million barrels of crude oil from strategic reserves, part of
the 180 million barrels of strategic crude stocks announced by the Biden administration in March.

Biden also said that if oil prices fall enough, the United States plans to buy back crude oil to replenish strategic inventories
.

Analysts pointed out that from a realistic point of view, the release of strategic inventories is negative in the near term and positive in the long term, because eventually the United States will have to buy back these crude oils
.
In general, the market presents the characteristics of the news market, and the futures price fluctuates up and down, swinging
wildly.

The OPEC alliance met in Vienna on Oct.
5 and agreed to cut its output target for next month by 2 million b/d, and oil prices have since rebounded
from nine-month lows, even though the actual cut was only about 1 million b/d.
Analysts point out that the OPEC alliance wants Brent crude to be around $90, so they will continue to cut production to maintain this price
.

U.
S.
crude inventories unexpectedly fell by 1.
7 million barrels last week, while analysts expected an increase of 1.
4 million barrels
, according to data released by the U.
S.
Energy Information Administration on Wednesday.
U.
S.
strategic crude inventories fell by 3.
6 million barrels last week, with total inventories just over 405 million barrels, the lowest since
May 1984.

In addition to OPEC Union production cuts, EU sanctions on Russian seaborne crude will take effect in early December, and a ban on Russian crude products will also come into effect in February next year, which may lead to a decline in Russian crude oil production and exports, exacerbating global supply constraints, thereby supporting
oil prices.
JPMorgan analysts said Russia's crude oil production will fall by 600,000 b/d by the end of the year because the European Union has imposed a ban not only on purchases of Russian crude, but also on providing key services
such as shipping, insurance and financing for Russian crude.

WTI crude is up 7.
62% so far this month, 13.
75% year-to-date, and Wednesday's close is up 2.
00%
year-on-year.
Brent crude is up 5.
06% year-to-date, 18.
81% year-to-date, and Tuesday's close is up 7.
68%
year-on-year.

In contrast, WTI crude rose 55.
5% in 2021, the biggest annual increase since 2009
.
Brent crude rose 50.
5 percent, its biggest gain since 2016, largely due to strong demand and limited
supply growth.