Oil Updates — Crude edges down; UAE extends support to Saudi Arabia for energy stability

RIYADH: Oil prices edged lower on Tuesday on fears of an economic slowdown and lower fuel demand from China as it persists with its stringent zero-COVID-19 policy.

Brent crude futures fell 21 cents, or 0.23 percent, to $91.41 a barrel by 1.30 p.m Saudi time, while US West Texas Intermediate crude futures fell 26 cents, or 0.30 percent, to $85.20.

US could sell oil from emergency reserve this week: sources

The Biden administration plans to sell oil from the Strategic Petroleum Reserve in a bid to dampen fuel prices before next month’s congressional elections, Reuters reported citing three sources familiar with the matter. 

President Joe Biden’s announcement is expected this week as part of the response to Russia’s war on Ukraine, one of the sources said.

The sale would market the remaining 14 million barrels from Biden’s previously announced, and largest-ever, release from the reserve of 180 million barrels that started in May.

The administration has also spoken with oil companies about selling an additional 26 million barrels from a congressionally mandated sale in the fiscal year 2023, which began Oct. 1, a fourth source said.

The Department of Energy will also release further details on eventually buying the oil back, reflecting the White House’s desire to combat rising pump prices while supporting domestic drillers.

“The administration has a small window ahead of midterms to try to lower fuel prices, or at least demonstrate that they are trying,” said a source familiar with the White House deliberations.

The source added: “The White House did not like $4 a gallon gas and it has signaled that it will take action to prevent that again.”

UAE says it fully stands with Saudi Arabia to support energy stability

The UAE, on Monday, said it fully stands with Saudi Arabia in its efforts to support energy stability and security, state news agency WAM reported, citing a foreign ministry statement.

The UAE also added that it supports the Saudi foreign ministry’s statement regarding the latest decision of the Organization of Petroleum Exporting Countries and its allies, known as OPEC+, and rejects statements that push for politicizing it, WAM said.

Japan to continue talks with stakeholders to decide on Sakhalin-1 project

The Japanese government is still checking details of Russia’s decree over the Sakhalin-1 oil and gas project and will continue to discuss with stakeholders of Sakhalin Oil and Gas Development Co. to decide whether to take a stake in a new Russian operator, the industry minister said on Tuesday.

SODECO, a consortium of Japanese firms, holds a 30 percent stake in the project.

To mitigate the impact of the yen’s plunge against the US dollar, the government will support exports, domestic investments and restarts of nuclear power plants which would help reduce the country’s imports of liquefied natural gas, the industry minister, Yasutoshi Nishimura, told a news conference.

(With input from Reuters) 


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