Markets on Watch For Coordinated Oil Reserves Release

• Markets remain on watch for a possible coordinated statement from global oil consumers today, with number of countries expected to release stocks from their oil reserves in a bid to relieve high fuel prices.
• Reports over the past few days suggest India, South Korea, China and Japan will join the USA in releasing reserves, but there remain questions over both the size and timing of such a release.- India are seen selling 5mln bbls, USA releasing 35mln bbls "over time". This represents ~6% of the SPR stockpile, which stood at ~605mln bbls last week.
• China have been dripfeeding markets from reserves already as part of a broader strategy, but the details are more vague. Size of interventions tend to be at around 7mln bbls from reserves, but the frequency and size could increase as part of coordinated action.
• OPEC+'s next meeting is scheduled for next week, 2nd December. The group are seen easing production curbs by 400,000bpd - but broad intervention could work against this expectation.
• Biden speaks directly on inflation and the economy later today at 1400ET/1900GMT, with Powell's re-appointment and action on oil prices seen as key tenets of his policy against runaway prices.
• The Brent crude futures curve has flattened since the Xi-Biden summit, showing a market that's pricing in some supply relief in the coming months. An ineffective reserves release, or a pushback from OPEC+ at next week's meeting could see the front-end of the futures curve swiftly reverse recent losses.

Source: Bloomberg/MNI