Joe Biden announced the release of oil from US reserves

US President Joe Biden announced the decision to release 50 million barrels of oil from the strategic reserves. As stated in a press release on the White House website, the purpose of these measures is to reduce fuel prices for Americans and eliminate the gap between supply and demand. 

The presidential administration noted that the use of strategic state reserves will be made in a coordinated manner together with similar steps by China, India, South Korea, Japan and the UK. Additional oil will start entering the market in mid or late December.

Brent crude reacted to this news with a local decline to $78.66 per barrel, after which the price soared sharply to $81.00. The cost of a barrel of American WTI oil was also declining, at the moment reaching $75.50 per barrel. However, WTI, like Brent, managed to recover quickly to $77.80. 

Analysts believe that the coordinated release of reserves will have only a temporary impact on prices, and draw attention to the risks of a potential blow to demand as a result of the fourth wave of coronavirus in the United States and Europe. If countries tighten quarantine restrictions again, prices for «black gold» will inevitably suffer. 

According to Rystad Energy analyst Louise Dixon, in November, demand for automotive and jet fuel in Europe will fall to 7.8 million barrels per day from October's 8.1 million b/d.