Is it useless for the United States to release oil reserves? If OPEC extends production cuts, oil prices may reach $100!

When President Biden announced earlier last week that he would release 50 million barrels of crude from the Strategic Petroleum Reserve, perhaps those around him expected oil prices to fall sharply and remain low
.
Conversely, oil prices rose on the back of strong hints from OPEC+ on possible production
cuts.
Oil prices fell sharply on Friday, but this was due to market fears of a new round of the epidemic and had little to do
with Biden's announcement that oil would be released from emergency reserves.

The release of oil reserves by the United States "will not work", experts say oil prices may reach $100 per barrel

Energy analysts warn that releasing oil reserves may not have the desired effect
.
They explained that no matter how many barrels of oil the U.
S.
or its partners in Asia and the U.
K.
release, OPEC could control the market
with longer production cuts.
They explain that the crude oil released is acidic and refiners don't like it because additional processing is needed to reduce sulfur levels — a process that requires natural gas, which is currently expensive
.
These explanations fell on deaf ears, but were accepted
by some in the market.
Now, analysts have warned
that crude oil rose to $100 a barrel.

Stephen Schork, editor of the Schork Report, said in an interview that oil prices are likely to continue to climb
despite the release of large oil reserves by the United States and other major consumers in hopes of driving down energy prices.
He believes that releasing large oil reserves will not do much because the strategic petroleum reserve is not used to stabilize oil prices
.
The Strategic Petroleum Reserve exists only to offset short-term, unexpected supply disruptions
.

Stephen Schork also said: "There are quite a few people betting that the price of oil will reach $
100 per barrel.
He added that this could happen as early as the first quarter of next year, especially if
there is a cold winter in the northern hemisphere.

John Kilduff, founding partner of New York-based energy hedge fund Again Capital, put it more bluntly
.
He believes that Saudi Arabia and OPEC can prevent more oil from entering the market
.
If WTI crude falls below $70, OPEC+ is expected to respond
.

In addition, the release plan of 50 million barrels of crude oil will not be realized overnight, nor will it be realized in a week, it is a slow release process
.
In addition, OPEC is preparing for the worst-case scenario, which would release a total of 66 million barrels of oil
in January and February.
While most OPEC+ producers do not see the need to amend the original agreement to increase production by 400,000 barrels per day, there is a provision that allows for a three-month
moratorium, according to the sources.

OPEC and Russia have all the initiative

Market analyst Irina Slav noted that OPEC and Russia combined, not even including Central Asian producers, account for half of
global oil production.
In fact, they hold all the initiative
.

A recent report noted that oil prices have risen by about 50% since the start of the year, as the pace and intensity of the demand rebound appears to have exceeded anyone's expectations, while the oil industry has responded cautiously in response to the new outbreak and supply remains tight
.

Oil prices fell sharply last week after news of a novel coronavirus was discovered in South Africa, but the news is unlikely to have a lasting impact
.

So far, OPEC+ has resisted all calls to increase oil production and is now interested in raising oil prices for fear of more coronavirus cases that could hit oil demand
.
In addition, the United States wants to release 50 million barrels of crude oil reserves, which OPEC is most worried about
.
Market analyst Irina Slav hinted that the next OPEC+ meeting could surprise production cuts, which could push oil prices
higher.

(Daily chart of Brent crude oil main contract)

At 9:36 Beijing time on November 29, the main contract price of Brent crude oil was 74.
72 US dollars / barrel
.