Experts believe that Biden's oil strategy is disastrous

Oil prices moved to an increase after yesterday's statement by the United States on reaching an agreement with major oil-consuming countries, including China, India, South Korea and Japan, on the release of part of their strategic oil reserves. Brent oil at the moment reached the level of $83 per barrel, WTI quotes were rising to $79.21 per barrel.

Experts note that the purpose of these measures was an attempt to increase the supply of oil on the market and reduce the price of it, but all these actions had the opposite effect. Perhaps the fact is that investors have already taken these measures into account in oil prices. Or they expected more decisive actions from OPEC and other major market participants. 

In general, large countries produce about 1.5 billion barrels of oil, providing demand for it for 15 days. And here there are risks that the release of oil reserves may backfire and cause prices to rise, given the relatively small size of reserves and their initial role (to use only in case of real emergencies).

There may be an even greater risk if OPEC+ retaliates by reducing the pace of oil production at the December meeting. And this negates the effect of releasing strategic oil reserves in just two months without increasing production. 

Analysts believe that in the current situation, President Biden should encourage oil production by American producers, rather than hinder them, which has been observed since his inauguration.