Finance

FTSE 100 Live: Oil prices resist Biden’s stockpile release plan


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fforts to curb energy prices through the coordinated release of strategic oil reserves look to be having little impact after Brent crude traded above $80 a barrel today.

The estimated 70 to 80 million barrels of additional supply from the US and other major oil consuming nations is below the 100 million-plus expected on Wall Street.

Amid fears that Opec and its allies might respond by cancelling or reducing plans to increase production, Brent crude rose overnight and consolidated those gains today.

On the corporate front, today’s session sees results from United Utilities and the speciality chemicals firm Johnson Matthey.

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Oil prices firm, NZ raises rates

President Biden’s move to release strategic oil reserves is having little impact on prices after Brent crude traded above $82 a barrel this morning.

Brent’s latest move higher reflected disappointment at the scale of the release and fears that Opec and its allies might respond by lowering their production targets next week.

As well as the 50 million barrels coming from US stockpiles, Japan today committed 4.2 million barrels and the UK has contributed 1.5 million.

But the estimated 70 to 80 million barrels of additional supply from major oil consuming nations is below the 100 million-plus expected by some Wall Street banks and equivalent to little more than a day’s worth of Opec output.

Deutsche Bank analyst Jim Reid said: “There’s no sign that inflationary pressures will be going away just yet, since much of what happens next will depend on the reaction of the OPEC+ group.

“If they move to cancel plans to increase production, then that could put upward pressure on prices again and help counter the impact of the move from the various energy consumers.”

The inflationary pressures continue to send bond yields higher as markets price in US policymakers raising interest rates as soon as next summer. The Reserve Bank of New Zealand is leading the way after increasing the cost of borrowing for the second time in as many months, taking its policy rate up by 0.25% to 0.75%.

High growth stocks are under the most pressure from rising bond yields, leading to the tech-laden Nasdaq finishing 0.5% lower last night despite modest gains for the Dow Jones Industrial Average and S&P 500.

A significant amount of US data is being released ahead of Thursday’s Thanksgiving holiday, including weekly initial jobless claims, the second estimate of Q3 GDP and the minutes of the most recent meeting of the US Federal Reserve.

CMC Markets expects the FTSE 100 index to open 15 points higher at 7281.

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