By Gina Lee
Investing.com – Oil was down Thursday morning in Asia, continuing the previous session’s downward trend. U.S. oil came under pressure after the U.S. reportedly asked major oil consumers, including China and Japan, to consider a coordinated release of oil reserves in a bid to lower sky-high prices.
Brent oil futures were down 0.47% to $79.90 by 23:14 PM ET (4:14 AM GMT), after sliding 2.6% to its lowest close since early October 2021 on Wednesday. WTI futures fell 0.76% to $76.96, after tumbling 3% overnight.
The U.S. move comes as surging energy prices contributed to record-level inflation in October, as the global economic recovery from COVID-19 continues.
"Should the U.S. administration order a Strategic Petroleum Reserve (SPR) release, that could send a strong political sign," Citigroup (NYSE:C) analysts said in a note.
"But... domestic refineries are unlikely to get an extra benefit, as light-end yields appear to have been already maxed out," the note added. U.S. producers have also faced backlash from investors for taking on debt to purchase new drills, which has led to their reluctance to overspend on drilling.
Oil climbed to seven-year highs in October, thanks to increased fuel demand as COVID-19 lockdowns were lifted and the Organization of the Petroleum Exporting Countries (OPEC) and allies (OPEC+) increased supply slowly.
The International Energy Agency and OPEC recently indicated that more supply will be available in the coming few months. OPEC+ is currently sticking to its agreement to boost output by 400,000 bpd each month.
Meanwhile, Wednesday’s U.S. crude oil data from the U.S. Energy Information Administration showed a draw of 2.101 million barrels for the week to Nov. 12. Forecasts prepared by Investing.com had predicted a 1.398-million-barrel build, while a 1.001-million-barrel build was reported during the previous week.
Crude oil data from the American Petroleum Institute released the day before, showed a build of 655,000 barrels.