China, OPEC cool on U.S. bid to tame oil prices
The U.S. is set to auction off 50 million barrels of oil from its reserves.
That’s part of coordinated action with other countries including India and Japan, which Washington hopes will help cool soaring prices for crude.
But it’s not clear quite how much China is willing to help.
And as the world’s largest importer of oil, that matters.
On Thursday (November 25) Beijing wouldn’t add to earlier comments that it would release reserves according to its needs.
Oil producers’ group OPEC also seems unmoved.
Reuters sources say it’s sticking firmly to plans for only a modest increase in output.
That’s all left markets unconvinced about the U.S. plan.
On Thursday international benchmark Brent crude was broadly steady.
One analyst told Reuters that traders believe more in OPEC’s ability to keep supply tight, than the U.S. ability to have an impact.
Goldman Sachs called the oil volumes in the U.S. plan a “drop in the ocean”.
Now OPEC and allies will meet on December 2 to discuss policy, but prospects for any change seem slim.
Strategists at the group are worried about a possible new dip in demand amid resurgent health worries, and think the U.S. move could just swell an oil surplus.