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Energy Summary for Nov. 23, 2021

2021-11-23 20:41 ET - Market Summary

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by Stockwatch Business Reporter

West Texas Intermediate crude for January delivery added $1.75 to $78.50 on the New York Merc, while Brent for January added $2.61 to $82.31 (all figures in this para U.S.). Western Canadian Select traded at a discount of $19.40 to WTI, up from a discount of $19.45. Natural gas for December added 18 cents to $4.97. The TSX energy index added 6.11 points to close at 167.40.

The battle for global oil control has begun. Today, the U.S. government announced that it will release 50 million barrels of oil from its strategic petroleum reserve (SPR), in tandem with smaller releases by China, India, South Korea, Japan and Britain, as they all seek to cool down oil prices that hit a seven-year high last month. This is the largest SPR release in history and the first time the markets have seen such a globally co-ordinated release of emergency reserves.

The announcement had the opposite of its intended effect today, with oil prices racing higher. This reflects anticipation about the response of OPEC+ at its imminent meeting next Thursday, Dec. 2. OPEC+ officials have already warned that any release of emergency reserves might prompt the group to cancel or adjust its own production-boosting plans, offsetting the new supplies. (It is also worth noting that the mere chatter about tapping the SPR was already successful in driving down prices by about $10 (U.S.) a barrel over the last month. For further context, the entire SPR holds 606 million barrels, enough to meet U.S. demand for about a month.)

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