(Bloomberg) -- Oil dipped ahead of an expected announcement by the U.S. on a coordinated release of reserves, with OPEC+ warning that it may not restore as much crude to the global market if consumers go ahead with the move.
Futures in New York slipped toward $76 a barrel after rising 0.9% on Monday. The U.S. is preparing to announce the release in coordination with other nations as soon as Tuesday, people familiar said. The move, likely in conjunction with India, Japan and South Korea, would be an unprecedented effort by consumers to tame prices. China said it’s also working to release reserves.
OPEC+ delegates said the release of millions of barrels is unjustified under current market conditions and the group may have to reconsider plans to add more oil when they meet next week. A Covid-19 resurgence in the U.S. and Europe, meanwhile, is raising concerns about the outlook for energy demand.
The rift between producers and consumers threatens to set up a fight for control of the global oil market. Oil’s rally has faltered over the past few weeks, in part due to speculation that consumers will release supplies from strategic reserves. The U.S. is considering a release of more than 35 million barrels over time, although the situation remains in flux and plans could change, according to a person familiar with the White House’s plans.
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India has yet to decide on the timing and volume of releasing reserves and a move will be a coordinated step with other major consumers, according to government officials with knowledge of the matter. Japan has determined it can use its stockpiles legally as long as it taps surplus supply, according to a TV Asahi report, which cited an unidentified government official. It didn’t provide further details on how much oil would be released.
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