Biden administration to tap oil reserves in bid to tamp down rising gas prices

 The largest release in American history

The federal government is taking the rare step of releasing oil from the nation’s Strategic Petroleum Reserve in an effort to address rising gas prices ahead of the holiday season, President Joe Biden said Tuesday.

As part of the move, the Department of Energy will make available 50 million barrels of oil to lower prices and address the mismatch between consumer demand and supply amid the pandemic that has driven prices to their highest levels in seven years, the White House said in a statement.

Biden called the reserve release the largest in U.S. history, and said in an address from the White House that “I will do what needs to be done to reduce the price you pay at the pump.”

Russia And Saudi Arabia See Oil Oversupply In 2022

First or second quarter?

“Everybody is predicting a surplus of supply starting from the first or second quarter,” next year, Russian Deputy Energy Minister Pavel Sorokin told Bloomberg on the sidelines of this week’s oil industry even in Abu Dhabi. The only question is when exactly that surplus will take place—but the difference is only a few months, according to Sorokin.

“Inventories have stopped drawing, which shows there is no deficit at the moment,” Sorokin added. Russia took the opportunity to point fingers at the U.S. government, which has for weeks been accusing OPEC of refusing to increase production to ease gasoline prices at American fuel pumps.

According to Sorokin, the U.S. Federal Reserve’s policy has a much greater impact on the oil and gas market than the supply and demand situation.

Saudi Aramco’s net profit up by 158% in Q3 2021

ARAMCO more profitable than Google or Apple

Saudi Aramco is the world’s most profitable company in Q3, beating tech giants such as Google, Amazon and Apple, as well as other listed energy companies such as ExxonMobil and Shell.

Thanks to the recent increase in oil prices, the Dhahran-based company reported today that its net income in the third quarter increased by 158 percent from a year ago to SR114 billion ($30.4 billion), compared to $11.8 billion a year ago, with a jump in it sales by 80 perecent to SR359 billion ($96 billion). Aramco president and CEO Amin Nasser, said in a statement today: “Our exceptional third quarter performance was a result of increased economic activity in key markets and a rebound in energy demand, as well as our unique low-cost position, our financial discipline and our proven ability to reliably deliver essential energy and chemical products to our customers.”

Fundamentals Justify $65 Oil More Than $75

The Delta variant set to slow global oil demand

The oil market is not as tight as the Wall Street consensus view, and with the current slowdown in demand growth, the fundamentals justify more like $65 a barrel Brent rather than $75, Standard Chartered said in a research note dated Tuesday.

At present, the oil market is in a mild surplus. The bank’s commodity analysts said that it will continue to be in surplus in September.

Standard Chartered’s view echoes last week’s warning from the International Energy Agency (IEA) that new mobility restrictions in Asia to fight the Delta variant are set to slow global oil demand growth in the second half of 2021.